New Delhi: Investor hopes of more policy measures by the government, following last week's big ticket reforms, will dictate the near term trend in the stock market which is likely to be volatile and may see profit-booking after a sharp rally last week, say experts.
Analysts said investors hope that the government will remain committed to reforms such as allowing FDI in multi-brand retail as well as the aviation sectors and unveil more such steps.
"Political strength and stability and hopes of further more reforms steps to be taken in future, has boosted the market sentiment," Rakesh Goyal VP Bonanza Portfolio said.
Marketmen said the government's resolve to stand firm on its last week's decision to allow FDI in retail, aviation and broadcasting sectors has boosted investor sentiments.
"After a huge rally last week, markets may see some profit-booking at higher levels. Stocks may consolidate. A similar sharp rally may not happen this week but the positive sentiment is likely to prevail in near-term," said Rajesh Jain, EVP retail research, Religare Securities.
The Sensex had on Friday surged to a new 14-month high after Samajwadi Party reassured the government of its support when Trinamool Congress pulled out of the UPA coalition.
The approval to Rajiv Gandhi Equity Savings Scheme (RGESS) to encourage first-time retail investors to invest in stocks has also lifted investor confidence, experts said.
"Market is now looking forward to some more reforms announcement," Gajendra Nagpal, CEO, Unicon Financial Solutions said.
Meanwhile, Prime Minister Manmohan Singh has said time has come for "hard decisions" to put the country on the path of high and inclusive growth.
In a televised address to the nation on Friday night, against the backdrop of Trinamool Congress withdrawing support to the government on FDI and diesel price hike and the opposition from other parties, Singh said, "we have much to do to protect the interest of the nation and we must do it now.


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