Market may trade in a range

The market is likely to be rangebound in the absence of any major domestic trigger, with Q4 March 2008 results nearing end. The market has reached a stage where liquidity will pull the prices up and valuations will keep them under control. The market will have its bit of volatility due to these two opposing forces. It will test the patience of investors and the nerves of the traders.

Next week is a curtailed trading week as the market remains closed on Monday, 19 May 2008, on account of Buddha Pournima.

Inflation data will be closely watched as it remains as a major worry and hindrance for the domestic growth. High inflation may compel the government to take more fiscal measures to rein in prices in addition to slew of measures taken recently.

The wholesale price index rose 7.83% in 12 months to 3 May 2008, higher than previous week's annual rise of 7.61%, government data released on 16 May 2008, showed. It was the highest since an annual reading of 7.93% n 6 November 2004. The annual inflation rate was 5.74% during the corresponding week of the previous year.

The government has taken a slew of fiscal measures such as ban on export of cement and non-basmati rice, cut in import duty on some items and imposition of export duty on some steel items to rein in rising prices.

Foreign institutional investors (FII) have, so far, sold shares worth Rs 529.10 crore this month, till 14 May 2008. They sold shares worth Rs 10,887.20 crore in calendar year 2008, till 14 May 2008. Domestic funds sold shares worth Rs 639.80 this month, till 14 May 2008.

The BSE Sensex rose 697.87 points or 4.17% to 17,434.94 in the week ended Friday, 16 May 2008. The S&P CNX Nifty rose 175.10 points or 3.51% to 5157.70 in the week.

The BSE Mid-Cap index rose 137.04 points or 1.96% at 7,129.70 in the week. The BSE Small-Cap index rose 114.62 points or 1.35% at 8,620.26.