India Stocks Outlook: Seen up further next week on short covering

[B. Karthick]

India Stocks Outlook: Seen up further next week on short covering
Saturday, Sep 20

Short covering ahead of expiry of September futures contract
Thursday is likely to help local key share indices to rise further
next week, but some profit-booking is likely when the market opens
Monday after the 5% surge yesterday.
Market may continue to gain on Monday, but will not see huge
movements like yesterday. Some profit-booking from domestic funds is
expected.
The broad market trend remains positive for the rest of the week
as talk that Securities and Exchange Board of India may follow other
global regulators and ban short selling could spur more short
covering.
Most market participants do not expect the upward momentum to
sustain beyond next week because the turmoil in global financial
markets continues to keep investors wary.
Globally, short selling has been banned and there are rumours that
SEBI may do the same... So, there may be some more short covering. But
beyond that there are not likely to be more gains.
We expects Nifty to hover around 4350 before the expiry of
September futures contract on Thursday.
Rumours of a ban on short selling in domestic market surfaced
after the U.K. Financial Services Authority and the U.S. Securities
and Exchange Commission imposed a temporary ban on short selling
stocks.
Nifty closed at 4245.25, up 207.10 points or 5.1% from Thursday.
Sensex ended at 14042.32, up 726.72 points or 5.5%. India VIX or
volatility index fell 1%.
There will be a lot of volatility in the banking sector, but it
will continue to stay mostly up and investors can buy on dips.
Bank stocks to sustain gains because their valuation looks
attractive.

B.Karthick
Research Analyst.