Fund-flow to dictate market trend in a volatile week ahead

Activity of institutional investors is likely to determine the future trend in the market which is at multi-months high. High volatility will be the hallmark with derivatives expiry lined-up during the forthcoming week.



Buying spree by foreign institutional investors' (FIIs) triggered a solid recent rally on the Indian equity bourses. FIIs pumped Rs 18,649.23 crore in equities till 24 September 2010, trumping an inflow of Rs 11,687.50 crore in August 2010. Their investment in the calendar year 2010 totaled Rs 38,144.33 crore.

On the other hand, domestic institutional investors' (DIIs) offloaded equities worth Rs 8,604.46 crore in the month so far, with their annual outflow pegged at Rs 7,236.04 crore.

Volatility may hit the roof as September 2010 series futures & options contacts are set for expiry on Thursday, 30 September 2010.

Profit booking after a four-week rally which propelled the key benchmark indices - the BSE Sensex and the S&P CNX Nifty to 32-months high above the psychological 20,000 and 6,000 levels respectively cannot be ruled out.

Auto, cement and steel stocks will be in action following the release of monthly sales figures for September 2010.

All eyes will be on the outcome of highly sensitive Ram Mandir-Babri Masjid verdict from the Allahabad High Court. The Supreme Court on 23 September 2010 ordered the lower court to delay a potentially explosive verdict on whether Hindus or Muslims own land around the demolished Babri mosque in Ayodhya. The top court will now hear an appeal for a stay on the verdict in the 60-year-old case on 28 September 2010.

Globally, the economic data on durable-goods orders and sales of new homes will be closely watched to gauge the progress of the US economic recovery.