The Nifty and the Sensex are expected to be choppy this week given the geopolitical developments in India and abroad and the series of data expected.
The maximum movement anticipated this week on the indices is three per cent on the upside and two on the downside from last week's close.
Election results of five States, especially UP, and expectations from the Union budget will have a bearing on market volumes.
There is talk on the street on the inevitability of an impending raise in indirect taxes especially excise duty to bridge the fiscal deficit. Other issues likely to impact financial markets this week are auto and cement numbers for February and HSBC's outlook on manufacturing and services sectors. Yields on the 10-year G-secs will remain range-bound between 8.19 per cent and 8.35 per cent levels while the rupee dollar will hover in and around Rs 48.5 levels to a dollar this week.
On the global front, it seems a trade-off has started between crude oil and major currency pairs. Rising crude oil prices will cool off the rising Euro versus the dollar and the Euro is estimated to stay below $1.3640 levels to a Euro.
Talking of Nymex crude futures, the worst case it can see this week is $115 to a barrel.
Though the second bailout deal for Greece has been accepted by the Euro zone countries, Euro zone observers are not certain whether it would be possible to fund more such bailouts for countries such as Portugal, Ireland, Italy and Spain.
The 10-year US treasury is anticipated to consolidate between 1.92 per cent and 2.07 per cent levels while gold might move up to a maximum of three per cent from last week's levels of $1776.4 to an ounce.
With US stocks close to their 2008 highs, a correction is in the offing even though even though data from the US has been positive in the last few weeks.
raghavendrarao.k@thehindu.co.in