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Ambarish Mukherjee

Developments on the Indo-Pak border front and related international developments as well as the forecast of another favourable monsoon will continue to dominate market sentiment during the coming week.

The Sensex, which gained a whopping 141 points on Friday after continuously shedding points for several days, could be expected to remain range-bound during the coming week.

Marketmen differ over next week's outlook but are unanimous that the border events and the Meteorological Department's forecast about this year's monsoon will be the two strong drivers of market sentiment.

While a section of the market expects the FIIs to be strong buyers next week, — FIIs were net sellers during the past week when domestic funds were buying — there are a large number of players who think the market will remain subdued.

According to Mr Ashok Aggarwal, a senior broker who operates simultaneously on BSE, NSE and DSE, the market will remain subdued during the week and the stand-off between India and Pakistan will continue to dominate the market.

Developments on the political front that might take place during the British Foreign Secretary's scheduled visit to India would also have an impact on the market, he said.

On the other hand, another very senior broker who operates nationally and a former President of Calcutta Stock Exchange, Mr Kamal Parekh, said that the market was bound to go up and the rise would be all-round. The PSU stocks may be expected to hog the limelight followed by steel shares, which are doing well, with steel prices also going up. Banking stocks also looked impressive as bank results were encouraging, he said.

Overall, it seems that if the market is convinced that there will not be another Indo-Pak war and that a peaceful solution is in sight, it is a fair possibility then that prices could go up during the coming week. Otherwise, it is likely to remain subdued.

The initial recovery on Friday came after eight continuous sessions of slide but now the recovery will be slow, according to an analyst with Value Research, the firm which tracks the capital market and mutual funds and their investments. On the bond side, analysts feel that there could be a marginal increase in bond prices after the wide fluctuations witnessed last week.

A good number of market players are expecting that HPCL and BPCL may move down in the short-term because it is becoming clear that disinvestment of these two companies will take a little more time now that the Government is contemplating floating an IPO before the disinvestment.

If the public issue is at a price lower that the present market price, then the retail investor may opt to sell now and buy at a lower price when the issue hits the market later during the year, according to marketmen.

IOC's decision to sell ONGC and GAIL shares too may have a dampening effect on these counters. Information regarding the potential suitors for PSUs such as Engineers India Ltd (EIL) and other disinvestment candidates would also affect the prices of the respective companies, analysts said.

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