Timely monsoons likely to lift market mood hit by European crisis fears
31 May 2010
Investors are expecting a weak market opening in the week ahead, tracking the US market drop on Friday, on ratings agency Fitch's downgrade of Spain's debt rating. The move has led to fresh worries that Europe's debt troubles may not end anytime soon.
Analysts say it could be a confirmation that the crisis may be far from over and may even worsen in the days ahead. They add that it would lead to sell-off across European markets, which in turn would hit global sentiment.
The Sensex closed at 16,863 on Friday, shedding around 3.7 per cent on concerns of the impact of Europe's debt crisis on its financial system and the credit markets' damaged sentiment.
Analysts say but for the surge in the market later last week, due to covering of short positions, the losses would have been sharper.
According to market participants, traders had sold off their bullish bets and would create short positions as they expect limited gains hereon.
They feel signals of good rainfall could overcome Eurozone sparked debt worries that have raised concern across global markets in recent weeks.