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Unpredictable Times

Unpredictable Times

The stock market had a volatile week as the bulls and bears battled for supremacy. The market fell on Monday and Tuesday but picked up on Wednesday. It was a relief that the bulls managed to snap their losing streak and the Sensex stayed in the green all through the trading session. Firm cues from select Asian markets and a positive start in equity markets across Europe boosted the sentiment on Dalal Street. Barring the FMCG index, all the other major BSE Sectoral indices ended in positive terrain. BSE Realty, BSE Power and BSE Capital Goods were the top gainers. Even mid- and small-cap stocks attracted buying interest.
But on Thursday, the tables turned and the bears were in complete control throughout the trading session. Heavy selling pressure was witnessed in the interest rate sensitive stocks ahead of the inflation announcement. Further on, weak global cues coupled with a sharp rise in crude oil prices also dampened the sentiments on Dalal Street.
Looking at the overall economic scenario, one should really not be surprised at this volatility. The macro-economic outlook is depressing. The fresh spike in inflation was a dampener to Independence Day celebrations. Interest rates have inched up further. The government's finances are in a mess due to the farm loan waiver and pay commission largesse. Inflation is not just a concern for India, but for the entire world. Global concerns over the economic slowdown have offset positives such as oil prices falling from their peak and the recent correction in commodity prices.
The good news – the week ended on a positive note. The market shrugged off a rise in inflation, crude oil prices, weak Asian bourses and a very weak start and closed with sharp gains. This was a result of buying in metal, banking, FMCG, oil and auto stocks in the afternoon session.
Just goes to prove that no one knows what to expect from the market anymore.