Markets may remain bearish this week: Experts

By Staff
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Google Oneindia News

Mumbai, June 17: The Bombay Stock Exchange (BSE) Sensex and the National Stock Exchange (NSE) Nifty are expected to stay on a bearish mood in the absence of any major trigger in the near term and the focus may shift to the primary market due to ICICI Bank's large issue which opens for subscription on Tuesday, market analysts said here today.

The dwindling turnover recorded in the cash and derivative segment could be partly attributed to the wary attitude adopted by the market participants after the turbulence witnessed in the second week of this month. Such a stance is immensely preferable to the smugness that was pervading our markets, they said and added that net foreign institutional investor (FII) inflow in the cash segment is decelerating after the deluge witnessed last month.

Mutual funds have also been net sellers this month. Capital goods, consumer durables and metals took the market forward last week while the other sectors languished, experts said.

ICICI Bank, the country's largest private sector bank, earlier said last Thursday it is raising up to Rs 20,000 crore (USD 4.9 billion) through a follow on public offer in India and US. The funds mobilised through these offerings will be used to expand its international and rural operations, and meet the growing demand for loans.

The issue will open on Tuesday, in both the countries and will remain on for a period of four days. The bank would issue equity shares worth Rs 8,750 crore in the domestic market. A similar amount would be raised through American Depository Shares (ADS) listed on the New York Stock Exchange, where the bank is already listed. The fund raising also includes a green shoe option of Rs 2,625 crore.

Economists pointed out that the progress of the monsoons will have to be watched closely and said that the next trigger is expected to come from June 2007 quarter results. Stock specific buying is expected to continue.

Some experts are of the view that there are some supportive factors for the market. The inflation has declined recently and it now hovers below 5 per cent. The domestic bourses closely track movement in global markets, so any sharp correction in global equities may trigger sell-off here as well, they opined.

Indian Hotels Company, Godfrey Phillips India, Info Tech Transformers, Inox Leisure, Zicom Electric Security Systems, Banco Products (I), Gujarat Fluorochemicals, Educomp Solutions, Aban Offshore, Gateway Distriparks, Peninsula Land, Amara Raja Batteries and House of Pearl Fashions will declare their audited results next week.

UNI

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