Global markets to influence BSE opening on Monday

Mumbai, May 27 (UNI) The past two weeks at the BSE Sensex have been the severest on traders and has only helped them to become pro-active.

The positive Friday close of Sensex at 10,809, up by 143 points from the previous close, largely on account of better performance of Bombay Stock Exchange (BSE) metals, oil and gas and IT indices, is likely to continue when the markets open on Monday.

The performance of global markets, especially the US and Japanese markets, with the Dow Jones, NYSE and Nasdaq as well as Nikkei closing in the green on Friday, would also have an effect on the Indian markets opening positively on Monday.

Recently, Union Finance Minister P Chidambaram convinced the investors that Indian economy has strong fundamentals and they should remain invested, which has had a sootheing effect on their psyche.

The foreign institutional investors (FIIs) will continue be net sellers for the coming week, but strong money market and Indian reserve of US dollar 162 billion will counter the FIIs' fleeting tendencies.

Domestic investors, especially the mutual funds, with strong cash reserves will be net buyers, and will assist the Sensitive Index (Sensex) to stay afloat in case of volatility.

Also, the markets for consumer durables and FMCG sector or segments catering to rural market will draw some strength from the progress of the monsoon to Kerala.

With the other factors remaining constant, markets are expected to stabilise around 11,000 level next week.

However, experts feel volatility may continue since inflation breached the 4.32 per cent mark, the highest this year, as against 3.96 per cent during the previous week, especially due to increase in the prices of vegetables, wheat and manufactured products.

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