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‘Stocks may be volatile despite diwali cheer’

‘Stocks may be volatile despite diwali cheer’
Notwithstanding the festive spirit, the stock markets are likely to remain volatile, with the release of industrial output data and inflation figures in the truncated week amid tepid global sentiments, say experts. Industrial output data for the month of September is scheduled to be announced on Monday (November 12), which will act as a major factor in determining the course for the week.

'The index of industrial production (IIP) numbers will have an impact on a few segments as the numbers are announced on Monday,' said IIFL Head of Research Amar Ambani. Experts said that despite the cheer around Hindu festivals, the markets are not likely to show any major change in momentum as global financial woes and US 'fiscal cliff' issues are likely to dominate investment sentiment.

'The Sensex is likely to be volatile in the coming week, with a weakish bias. But because of Diwali, sentiments are likely to be a little better. However, global problems and US fiscal cliff issues would dominate investor sentiment,' explained Ashika Stock Brokers Research Head Paras Bothra.  In the wake of the US presidential elections last week in which President Barack Obama of the Democratic Party defeated challenger Mitt Romney of the Republican Party, the biggest issue now being talked about is how the American government is going to tackle critical tax issues, added Bothra.

The week would be a truncated one for the equity markets as there would be no normal trading session on 13 and 14 November on account of Diwali holidays.

There would be a special trading session 'muhurat', during which trading would be conducted on Diwali day (November 13) on leading bourses National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

On this day trading would be conducted between 3:45 pm and 5 pm, according to information available with the exchanges.

Diwali also marks the New Year for traders, according to the Hindu calendar or Samwat 2069. Two major companies, DLF and Jaiprakash Associates, will declare their results on Monday.

Another major trigger for the market would be the wholesale price inflation and industrial output data.

'If the inflation figure, which is scheduled to come out on November 14, decreases to some extent, it is going to be taken in a very positive note by the market. But the chances of the inflation figure receding are very low and markets are likely to be under pressure, pointed out another expert.

The wholesale price index-based rate of inflation was at a 10-month high of 7.81 per cent in September.

Disappointing performances from State Bank of India (SBI), Tata Steel and Oil and Natural Gas Corporation Ltd (ONGC) pulled down the Bombay Stock Exchange's benchmark 30-share Sensitive Index (Sensex) by 163 points to 18,683 on November 9.
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