Political drama and F&O expiry will keep market volatile:Experts

Mumbai, Aug 26 (UNI) Further developments in the tug-of-war between the Congress and the Left will keep the market volatile this week, ahead of this month's derivative contracts expiry series on Thursday, experts said here today.

''Market nudged higher last week, tracking recovery in Asian markets on speculation that the US Federal Reserve will cut benchmark rates sooner rather than later. Also the Bank of Japan (BOJ) decision to keep interest rates unchanged at 0.50 per cent boosted the market further. But, the domestic bourses underperformed its Asian peers due to the fluid political situation in New Delhi, with prospects of mid-term polls looming large over the country.

World stock markets had fallen sharply in recent weeks as problems in the risky US subprime mortgage sector spread to other markets.

Also foreign institutional investors (FIIs), who were the key drivers of the recent rally have resorted to selling. As per the latest data they sold shares worth Rs 8, 895.80 crore this month so far. It may be recollected here that FII inflow last month totalled Rs 23,872.40 crore,'' market analysts surmised.

The market ended its four week losing streak to post gains last week, when the 30-share BSE Sensex rose 283.35 points or 2 per cent to settle higher at 14,424.87, while the National Stock Exchange (NSE) S&P CNX Nifty rose 82.10 points or 1.99 per cent to settle at 4,190.15 last week.

Besides, Inflation has been under control. India's wholesale price index rose 4.10 per cent in the week ended Aug 11, slightly up from the previous week's 4.05 per cent, due to higher food and manufactured product prices, official data showed last week.

UNI