India's stock market is bracing for choppy though short trading this week as investors expect runaway oil prices to keep share gains under check, dealers said. On Friday, the Bombay Stock Exchange's 30-share Sensex closed at 6,700.34, down 153.39 points from the previous week's close. Dealers said trading was expected to be volatile due to a week shortened by Friday's public holiday and as investors pause to take stock of their year-end financial commitments ahead of March 31.
"Friday's strong closing will help the market to open firm on Monday, but trading will be choppy as it is only a four-day week," said Prakash Lala, managing director at Centaur Capital Market Services.
"Also global markets are heavily influenced by oil prices which are trading strong."
The stock market is closed on March 25 for Good Friday and the Hindu holiday Holi.
World oil prices eased slightly on Friday, a day after surging to fresh record highs nearing 58 dollars in New York amid the backdrop of robust global demand.
New York's main contract, light sweet crude for delivery in April, edged down 10 cents to 56.30 dollars in electronic dealing Friday.
On the New York Mercantile Exchange, the April contract had surged to a record intra-day high point of 57.60 dollars per barrel on Thursday.
"Investors are also restraining fresh purchases to meet their year-end tax liabilities," Lala added.
Dealers said foreign fund inflows were also slowing as global investors took a breather from galloping Indian shares which had surged in the last few months.
Indian markets have been in a bull grip for the last two years, with the Sensex surging over 13 percent in 2004 on the back of high foreign fund investments. Foreigners invested 8.51 billion dollars in Indian equities in 2004, the highest since the economy was liberalised in 1991.
Dealers said some money was bound to be diverted from the secondary market in the coming months as more than a dozen public offers worth over 40 billion rupees (930 million dollars) are being launched in the market.
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