Indian markets, which registered their best upward rally of the year last week, arelikely to continue their northward rally in the coming days too. With inflation under 3% mark coupled with foreign institutional investors again entering the domestic markets and strong cues from the global markets will have positive impact on the markets.

With US markets closing with smart gains on Friday, Indian markets are expected to open with some positive rally on Monday. Dealers in the markets say that, positive rally is expected in the coming days as global markets are also moving on positive terrain. However lack of any domestic cues to trigger the markets, Indian markets will have to look to the

West for the cues in the coming days.

On Friday, last trading day of previous week, the benchmark 30-sharev Sensex of Bombay Stock Exchange (BSE) added 412.86 points or 4.95% to close the day at 8,756.61 points. The broader S&P CNX Nifty of National Stock Exchange (NSE) added 101.80 points or 3.89% to end the day at 2,719.25 points.

Indias inflation rate fell for the sixth straight week to 2.43% for the week ended February 28, compared to 3.03% in the preceding week.

An analyst from the leading broking house said, Last week was one the best week for the Indian markets in 2009, despite markets being closed on two consecutive days on March 10 and 11. If things continue to remain same, we might witness a short positive rally. However, there is huge short covering in the markets since past few days, so volatility might remain in the markets. Since past few month FII were not doing any activity, so we had flat markets now we can expect some movement in the markets. However profit booking might also take place once Nifty witness 2,850 levels.

Last week, Banking sectors had witnessed huge short covering, a dealer in the markets say that, Banking stocks might remain firm next week also.