Market players predict fresh downtrend
Mumbai: After having previously stated that the market has bottomed out, serious market players are of the opinion that the inherent nervousness in the markets is likely to bog share prices down in the week ahead with the market in a bear grip, as a result of which the sensex may end the next settlement at 3,800-levels. Analysts predict that any recovery now will be short term, and no long term solution will be found till July this year.

The last week saw the market being subdued with sheer lack of buying interest, a weak rupee and FIIs have been net sellers. According to confirmed sources, the market the market lacks a driver and sentiment is weak. Market players believe foreign funds are selling Indian stocks on fears that the US Federal Reserve may announce a hike in interest rates, as a result of which funds may shift from equities to US bonds. To add to this, there are indications that Japan, previously a zero-interest market, may also raise its interest. In other words, most developed markets are looking at a hike in interest rate, which will restrict emerging market inflow, as foreign funds will face redemption pressure.

While liquidity play appears to be restricting the market to a narrow trading zone, analysts believe the local funds are holding more than enough cash to meet redemption pressure, if any. However, they are not entering or exiting the market, following the global trend of huge sell-offs.
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