The Indian equity markets defied all trends and remained positive for the week that passed by.

Firstly, the failure of the auto bail out package caused most of the Asian and European markets to head southwards, but Indian indices bucked that trend. Then the news that the Index of Industrial Production (IIP) returned negative numbers after more than a decade also did not deter the market. However, the markets are expected to catch up with these realities in the coming week.

Trade experts reckon that short covering at the lower end supported the market even when the indices elsewhere were tanking. In Asia, key indices were down and the slump ranged between 3% and 5%. The fall was more severe in Europe.

On Friday, last day of previous week, the 30-share Sensex of Bombay Stock Exchange (BSE) closed at 9,690.07 points gaining 44.61 points or 0.46%. The broader S&P CNX Nifty of National Stock Exchange (NSE) ended 1.20 points or 0.04% higher to end the day at 2,921.35 points. Among the Sensex set of companies, 17 stocks were positive on Friday and 13 in red. The market breadth remained positive as 1,547 stocks advanced while 851 stocks declined and 81 stocks remained unchanged.

However, with the Fed meeting along with Organisation of the Petroleum Exporting Countries (Opec) meeting scheduled in the coming week, is seen as an important event that analysts would be tracking. Also, news that investors could have burnt around $50 billion in fraud investments of a ponzi schemes floated by former Nasdaq chairman Bernard Madoff is likely to have a bearing on the markets. Investors have been risk averse and this would add to it.

Already, reports that the Geneva-based banks and investment funds have lost more than 5 billion Swiss francs ($4.22 billion) in the alleged $50 billion fraud by former Nasdaq chairman Bernard Madoff are doing the rounds. Geneva-based banks and investment funds have lost more than 5 billion Swiss francs ($4.22 billion) in the alleged $50 billion fraud by former Nasdaq chairman Bernard Madoff, Swiss newspaper Le Temps reported on Saturday.

Some dealers also added that, apart from international events, there are expectations of a stronger second round of the stimulus package and some more measures from the central bank to infuse more liquidity in the market.

Anita Gandhi, head of institutional business at Arihant Capital Markets said, ?We assume that, the impact of poor IIP numbers will reflect in the market in the coming days. However, now we are eying some strong action from the Reserve Bank of India (RBI) after the weak IIP numbers. But overall we believe that, markets are likely to remain on the positive terrain, as foreign institutional investors (FII) are net buyers since past few days.?

An analyst from the leading broking house said, ?The markets are unpredictable, we can say that trading rally will continue in the markets, but it is difficult to predict where the markets will bottom out. However, we feel that lot of bad news are yet to come, as the Q3 and Q4 earnings will be unsatisfactory. We might see Sensex between 8,000 and 11,000 for the next over one year.?

But as of now, dealers feel that there the markets will remain edgy and traders will be looking at developments before taking fresh positions.