Dalal Street is expected to remain volatile this week ahead of derivative settlement and on weak global sentiments, although the truce between the Ambani brothers may have overall positive fallout.
Some market observers, however, were gung-ho on the truce, saying that scrips of both the groups -- RIL (Mukesh) and ADAG (Anil) -- are likely to spurt when the markets resume trade on Monday.
RIL has the maximum weightage in the benchmark indices on both the stock exchanges, the BSE and NSE.
"A positive reaction (to the truce) is expected in the share prices of the companies belonging to the two groups," SMC Capitals Equity Head Jagannadham Thunuguntla said.
Striking a cordial note, the Ambani brothers agreed on Sunday to dump their differences and non-compete agreements, saying this would eliminate any room for further "disputes".
"Markets are expected to open on a positive note on Monday tracking firm cues from US stocks, but the gain is unlikely to sustain as investors are cautious and overseas fund houses are continuously pulling the money," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.
Investor sentiments are weak as technical charts suggest staying away from fresh buying in the market, he added.
According to brokerage house ShareKhan, "Domestic markets may remain volatile in the week ahead of F&O expiry on May 27, 2010, and lots of earnings scheduled in the next week that may affect the market."
During the week, companies like Tata Power, Canara Bank, GMR Infra, Hindustan Unilever, Bank of Baroda and Power Grid are slated to announce their financial results.
The developments on the global front regarding the eurozone debt crisis and foreign institutional investor (FII) inflows will be a huge factor to determine the future path of the market, analysts said.
The Euro Aid package approval by the German Parliament may help bring back some stability in the euro in the short-term, which in turn may bring some pull back in commodities that have seen a sharp unwinding, Unicon Financial said.
Over the weekend, the Sensex closed at 16,446, lower by 549 points, or 3.23 per cent, while the Nifty closed at 162 points, or 3.19 per cent down at 4,931.
FIIs are withdrawing their money from India and remained net sellers for the third week in a row, selling stocks of Rs 3,860 crore during the week, as per the data available with market regulator SEBI.