Markets to tread with caution

Will the market bounce back this week? After a sharp correction last week, the market is likely to trade cautiously next week amid the mixed...

Will the market bounce back this week? After a sharp correction last week, the market is likely to trade cautiously next week amid the mixed trends in stock prices.

Factors like soaring crude oil prices, foreign fund outflows and year-end considerations are the main worries. ‘‘Marketmen are likely to be cautious. I don’t expect another big crash or a big recovery,’’ said BSE dealer R.A. Podar.

Brokers feel that the recent FII outflow could be temporary, as the India story still remains attractive, with expectations of around 6 per cent to 7 per cent annual growth. Besides, fresh money may be coming in from the domestic funds, which have garnered over Rs 2,000 crore in primary markets in the last couple of months.

The outcome of a US Federal Reserve meeting next week will also be keenly watched next week for investors, already grappling with record high oil prices. Economists expect to see another 25 basis point rise in the benchmark federal funds rate, bringing it to 2.75 per cent in the seventh quarter-point tightening since last June.