The market is likely to come under some more pressure early on Monday after inflation jumped to 12.44% in the week ended August 2 as against 12.01% in the previous week. This was much higher than consensus expectations of 12.1-12.2%. As a result, the sentiment is expected to take a beating amid nagging concerns of further monetary tightening measures. Lack of positive announcement on the Participatory Notes (PN) issue seemed to spook the market on Friday, with the Sensex and the Nifty falling 2.4% and 2.2%, respectively. Overall, we expect the undertone to turn slightly weak again amid renewed concerns over rising inflation and slowing economic growth. However, we do not rule out a rebound if global markets remain stable and crude oil doesn't resume its advance. On the flip side, any fresh weakness in global equities will add to the pressure on local markets. Action in the F&O segment might pick up as 39 new scrips will be available for trading from August 21, and we will have an expiry a week later.
Sunday, August 17, 2008
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