After last week’s recovery, Dalal Street is expected to face some resistance this week as selling pressure is likely to emerge in blue chip stocks.Buyers will have to strive hard to keep sellers at bay. Sensex ended last week with a decent gain of 234 points, or 3.80 per cent, at 6,388.48. ‘‘If bulls manage to stave off the bear attack, the market will gain more and the index may even touch 6,500. There will be a tug-of-war between bulls and bears this week,’’ said BSE dealer R.A. Podar. The usual factors — oil prices and foreign fund flows — would influence the trend of the market. A major factor which will work against the bulls is that the market rose steadily last week — rising in all five trading sessions — on sustained buying interest. While value buying emerged in the blue chips, an expected cut in the US interest rates and fresh banking sector reforms helped the market regain some of its recent losses. The trend in the US interest rates are crucial for markets across the globe, including India. Foreign funds — mostly from the US — have put in huge money in the emerging markets like India in the last couple of years as US interest rates have remained extremely low. However, with recent hikes in the US interest rates, there has been a significant reversal in foreign fund flows to the emerging markets. Foreign funds flows to India have been erratic of late. But Thursday’s inflow of Rs 123.30 crore resulted in the FII inflows remaining positive at Rs 69.90 crore for the first four days of the week. The easing of oil prices will boost the sentiment. But the rising inflation level will neutralise this impact.
