Key Indian equity indices are expected to remain volatile in the coming day?s on the back global financial crisis. Events like quarter results of Infosys technologies, announcement of IIP numbers on October 10, coupled with cues US markets will guide the domestic markets in the coming week. Also, developments from the Securities & Exchange Board of India (Sebi) board meeting on Monday will also be closely watched.
Market denizen expect the board to take a close look at the participatory notes issue for the foreign institutional investors and expect some relaxation to stem the outflow of money from the equity market. Already, overseas investors have been net sellers of over $9 billion in the calendar year. Any relaxation will be seen as a positive and will spur the market.
In its absence markets are expected to see a further downslide as traders and investors will continue to exit their positions. Most do not expect the US bailout plan to save the economy from recession and its impact spreading across the globe. Sentiment technology sector, therefore will remain weak. Macro economic uncertainty in the US and below-expected earnings from the infotech sector could effect in further selling in the sector, said a dealer from the leading broking house. Analysts have alteady factored a flat earnings growth for most of the sectors, including the IT sector, however huge volatility of the rupee could spring in some surprises. All eyes will be on the guidance offered by companies future earnings, and Infosys, will lead the trend setting here.
On Friday last trading day of the week, 30-share Sensex was down by 529.53 points or 4.05% and had ended the day at 12,526.32 points. The broader S&P CNX Nifty of National Stock Exchange (NSE) lost 132.43 points or 3.35% and had closed the day at 3,818.30 points.
?The outlook remains weak, even though the crude is weak, and markets are expected to test a new low very shortly. Monday we may see a gap up opening due to better than expected inflation number which was at 11.99%. This will give an opportunity to the investors to exit at higher levels,? said Alex Mathew Head, Research Centre?Geojit Financial Services Limited.
But weak closing of US market might also have some more negative impact on domestic markets on Monday. On last Friday, Dow Jones Industrial Average lost 157.47 points or 1.5% and ended at 10,325.8 points. Nasdaq Composite was marginally down by 29.33 or 1.48% and had closed at 1,947.39 points.