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'Political developments hold key for market'

As per analysts, Dalal Street is likely to get the much needed direction and stability after the vote of confidence on UPA Govt on June 22 this week.

business Updated: Jul 20, 2008 13:25 IST

Dalal Street is likely to get the much needed direction and stability after the vote of confidence on UPA government on June 22 this week, even as falling crude oil prices may impact positively, analysts say.

"Result of the vote of confidence on the UPA government on June 22 would be the main factor to impact the market sentiments this week," brokerage firm Bonanza Portfolio President, Research, PK Agarwal said.

"The surge in crude oil prices has softened which affected the market positively and if the political situation remains stable, a good rally can be witnessed during the week," he added.

Analysts believe the market, which has been beaten down severely in the past few months, may witness a strong rally if the political situation stabilises even as movement of crude oil prices and fears of further monetary tightening by the Reserve Bank of India may continue to haunt the sentiments.

"Market is likely to remain range bound and may consolidate this week.. But with a higher degree of volatility due to uncertainty on the political front and the global oil prices," domestic brokerage firm SMC Global Vice-President Rajesh Jain said.

After falling to a low of 12,514.20 last week, the BSE benchmark index, Sensex, closed with a gain of over 500 points at 13,635.40 on Friday, while the 50-share index Nifty settled at 4,092.25, up 145 points.

Last week, the market had witnessed renewed buying as global markets surged owing to fall in crude oil prices indicating signs of abatement after hitting a record high of 147 dollar per barrel.