Profit-booking may drag markets this week: Analysts

After hitting the six-month high level last week, stock markets are likely to see a downward trend this week with investors booking profits, analysts said.

"Stock market has seen one of the biggest run-ups recently. Strong FII inflows have helped the rise. Retail investor interest has also been observed for the last two weeks. Regular profit-booking is advised here," Milan Bavishi, Research Head, Inventure Growth and Securities said.

New Chevrolet to hit roads

Extending the gaining streak for the seventh week in a row, the the BSE benchmark Sensex gained nearly 541 points to end the week at over six-month high of 18,289.35 on hopes of cut in key policy rates by the RBI after a fall in overall inflation.

Foreign Institutional Investors (FIIs) bought shares worth Rs 4,518.09 crore, including provisional data of February 17, as against Rs 4,040.80 crore last week.

In Images: Toyota Innova's 2012 avatar features new design

Brokers also said this will be a shortened week for derivative expiry and there could be profit-booking. Markets will remain closed on Monday on account of Mahashivratri.

CNI Research CMD Kishore Ostwal said that "the market is at a huge risk of correction though settlement considerations will keep fire alive till Thursday".

In Focus: Chennai new frontline for latest paper wars

Analysts also said the technical indicators show the benchmark index could be ripe for a correction as it is deep in overbought territory.

"Indian indices will see volatile trading sessions in view of the futures & options expiry this week. Although everybody is waiting for a correction in the market, we cannot time when a pullback will come," Ashika Stock Brokers Research Head Paras Bothra said.

Globally, European stock markets closed higher on Friday as sentiments got a boost on hopes that Greece is nearing a bailout deal as the European Central Bank (ECB) and European officials were moving closer to an agreement to end the country's funding gap. A strong US economic data also propelled the rise