Volatility with negative bias expected

The market is expected to remain highly volatilie in the coming week, with sentiment looking bearish.

Inflation has been a concern for quite a while now. Several steps to contain it have been rendered futile. Indian shares had slipped to a five-month low after a rise in inflation spooked investors already unnerved by the recent market turmoil. Data released on 16 March 2007, showed that India's annual inflation rate rose 6.46% for the week ended 3 March 2007, heading back towards two-year highs hit last month, and raising the prospect of a central bank action to contain price pressures.

On 16 March, the BSE Sensex settled at 12,430.40, down from the psycologically important 12,500 level. On a weekly basis, it was the fifth consecutive week of losses for the market. The Sensex was down 3.7%, and the Nifty 3% for this week. The Sensex has lost a sharp 15.6% from a record high of 14,723.88 on 9 February 2007.

From its last closing level of 3,608.55 for the Nifty, the next support exists in the range of 3,555 - 3,516 and on an upmove, may face resistance at 3,714.

Now technical analysts are looking at 12,330 levels for the Sensex to take support on the downside, while they will face resistance at 12,845 levels on the higher side.

Any sharp rise in crude oil prices, above the $60-62 per barrel mark, will trigger fresh selling. Any weakness in global markets will weigh down the sentiment further.

Pfizer India, KSB Pumps, Federal-Mogul Goetze (India) and NEPC India will announce their financial results in the next week.