Market may stay weak

The market is expected to decline further on profit-booking. From an all-time high of 14,723.88 struck on 9 February 2007, the Sensex has corrected a sharp 1,838 points (14.27%) in less than a month. Lack of inflows at higher levels, high valuations, rising inflation and interest rates, fears of an earnings slowdown in the coming quarters, defeat of the Congress in Uttarakhand and Punjab and profit-taking at higher levels have bedevilled the market of late. Selling pressure is likely to continue further.

The market was expecting reforms in the Union Budget 2007-08, a key trigger for any future rally. However, the Budget fell short of all such expectations.

Global crude oil has once again topped $62 per barrel. Any sharp rise from here may also lead to a sell-off.

On the flip side, Inflation which had been a cause of concern over the few weeks started cooling for the second straight week. However, latest figures show inflation for week ended 17 February 2007 at 6.05% versus 6.63% in the previous week. The development will soothe many frayed nerves. The market had estimated inflation at 6.30%. The drop was largely due to a cut in petrol and diesel prices, and may provide some respite to the market.

Grindwell Norton, Micro Inks, Cambridge Technology Enterprises and ITD Cementation India and R Systems International will announce their results in the forthcoming week