Inflation, crude will continue to dog market

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Mumbai, Aug 17 : With uncertainty in world crude prices and rise in inflation rate, Indian equity markets will look for global cues this week.

Dealers say there might be some tightening of monetary policies by Reserve Bank of India (RBI) in the coming week to control inflation.

Dealers and investors hope that the 39 new stocks that will be introduced in the derivatives segment on August 21 will have a positive impact on the market in this week.

Viral Mehta, a dealer at Mehta Finstock Pvt Ltd, said, “In the last week we saw a lot of volatility due to global crude prices. We also saw weakness due to the long weekend and profit-booking as the market was not keen to take positions home. In the coming week, crude and inflation will play a crucial role. The addition of 39 stocks in derivatives segment will generate more liquidity in the market.”

On Friday, there was huge volatility as the 30-share Sensex of Bombay Stock Exchange (BSE) lost 368.94 points, or 2.44%, to end at 14,724.18 points. The broader S&P CNX Nifty of National Stock Exchange (NSE) shed 98.35 points, or 2.17%, and closed at 4,430.70 points. The Sensex lost 443.64 points, or 2.92%, in the last week, and Nifty slipped 98.8 points, or 2.18%.

Hitesh Agarwal, head of research at Angel Broking, said, “We saw people booking profit in the last week. We believe the markets are going to react to the 12.44% inflation figure in the next week.