Week Ahead: Mood likely to remain cautious

Last Updated: Sun, Nov 24, 2013 07:43 hrs

The mood is likely to be somewhat cautious on the Indian bourses for most part of the coming weak, with investors awaiting the GDP data for the July - September 2013 quarter.

The market saw some profit taking over the past three weeks and the Sensex, which rose to a historic high on the Muhurat Session on 1 November 2013, has lost significant ground since then.

Amid lingering concerns about high inflation and fears of another rate hike, it will not be a surprise if the market sees some more correction in the near term. The likelihood of the U.S. Federal Reserve scaling down its $85 billion a month bond buying program too will weigh on the markets.

With the near month derivatives contracts expiring on Thursday (28 November), movements will be quite volatile at times. Some top notch stocks may regain some lost ground on short-covering ahead of derivatives expiry.

The government will release the GDP data for the second quarter ended September 2013, on Friday, 29 November 2013.

Shares from rate sensitive banking, realty and automobile sectors are likely to see some wild swings. The rupee's movements will make a significant impact on the market. After coming back strongly from its all-time low against the greenback, the partially convertible Indian currency has been seeing some weakness in recent sessions, and a further depreciation is not ruled out.

The U.S. markets ended on a firm note on Friday on some upbeat economic data, and this is likely to set up a steady start for Asian markets on Monday. Still, the likelihood of stimulus tapering will prompt investors to restrain from building up positions any significantly.

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