Stock Market Expected to Remain Volatile as Bulls had a burly
fight in the last 2 trading sessions but could not overrun bears, with the
markets ending in the red zone for the 5th consecutive week, owing to rupee
volatility and growth concerns.
Benchmark indices staged a smart recovery on bargain hunting
and comments from Finance Minister P Chidambaram and Reserve Bank of India
Governor D Subbarao that India doesn't plan to introduce capital controls.
The Sensex ended 0.42% lower, while the Nifty fell 0.66% in
the week ended August 23. The S&P BSE Mid-Cap index fell 1.48%, underperforming
the Sensex. The S&P BSE Small-Cap index declined 0.42%, matching fall of
the Sensex.
The barometer index, the S&P BSE Sensex, regained 18,000
after sliding below that level during the week.
Nifty also managed to close above its crucial level of 5400.
In the coming week, the trend in investment by FIIs will be
in focus which have sold net of $701.4 million worth of shares in the five
sessions as of Thursday.
Talking of the overall sentiment, the markets are expected
to remain volatile and move in a range until the currency stabilises, say
experts.
Important events are lined up this week: June quarter GDP
data and F&O expiry.
"There are too many events which are there this week,
and the market will continue to remain reasonably volatile for a long time till
the time the currency stabilises," said BP Singh, Executive Director &
CIO-Equities, Pramerica Mutual Fund in an interview with ET Now.
"If you look at last four months, the currency has
depreciated from 54 to the current levels of around Rs 63-64 odd and if you
notice the market which was around 5800 is currently at around 5450; so, every
time when the currency stabilises the market actually gets its leg back and
gets back its strength," he added.
Technically speaking, the weekly chart now a strong bullish
hammer Japanese candlestick pattern. The low of the week i.e. 5254, will now
act as a strong support in the short term as well as in the medium term.
"A price move beyond 5530 before Tuesday afternoon will
confirm that a price reversal has occurred and a higher degree upmove towards
5700/5850 levels may begin to unfold," said Shardul Kulkarni, senior
technical analyst at Angel Broking.
"Momentum oscillators on the daily and weekly charts
are extremely oversold and also signal the possibility of a pullback," he
added.
