D-Street to stare at high Volatility

 
“The market is facing resistance at higher levels. There is a high degree of volatility in the market which shows that investors are nervous about trading,” Kejriwal Research and Investment Services head Arun Kejriwal said.

Analysts believe that the market would trade in the range of 4,960-5,200 during the week and try to consolidate at those levels as there is no clear direction about the movement of the US dollar against the rupee.

“Traders should be cautious at this level. The US dollar is moving up and the crude is falling. If this kind of a movement continues for long it can bring in some kind of a breakdown at the lower side,” says SMC Global vice-president Rajesh Jain.

According to Geojit BNP Paribas Financial Services Research head Alex Mathew, “we are advising our clients to stay away from the market now, as any kind of buying or selling would leave you as a loser in this volatile market.” Kejriwal adds, “the market is facing resistance at the higher levels, as every time the market tries to move up it faces a selling pressure. The market is trying to find a level for itself and with no new triggers expected in 2009 it would look at global markets for direction.”

Marketmen said with no new announcement expected in the domestic front for the rest of the calendar year, the stock market would continue to track global markets for directions as it waits to embrace the new decade.

However, brokers are expecting some sectoral movements during the week. “While consumer goods and IT stocks are likely to outperform, FMCGs, infrastructure and oil and gas are expected to remain under pressure,” Jain notes.

Mixed cues from the global markets would keep the domestic stocks jittery during the week and a strengthening dollar would make foreign investors pull out money.

“Markets would have a gap-up opening on Monday. From Wednesday there can be some clarity in the market as the market has been trading in uncertainty for the past two weeks,” Mathew says.

During the week, the foreign institutional investors pumped Rs 1,020 crore into the domestic equities. On Friday, the US market was mixed with the Dow Jones Industrial Average moving up 0.63 per cent to 10,471.50 and the S&P 500 index gaining 0.37 per cent to 1,106.41. However, tech-heavy Nasdaq closed down marginally by 0.03 per cent to 2,190.31 points.