Investors are likely to remain nervous this week ahead of the expiry of near-month

RELATED ARTICLES Sensex ends flat; outlook still weak Sensex regains 16k level; ends 274 pts higher NSE loses trillion-dollar market cap tag; BSE a whisker away NSE loses trillion-dollar market cap tag; BSE a whisker away Sensex dips below 16k as rupee breaches 56 level

futures and options contracts, due on Thursday, and in the runup to the Rail Budget as well as Union budget.

Marketmen said there are certain expectations from the Union budget on possible reforms in banking, retail and infrastructure sectors. Railway stocks could be in the limelight ahead of Rail budget, scheduled to be unveiled on February 24, analysts said.

“Normally, the market remains nervous in the budget week. I don’t expect any surprise this week. Though there is no major expectation from the budget this year, we may expect some reforms in banking and financial, infrastructure and retail segments. Thus, the respective counters may see some action ahead of the budget announcement,” Vaibhav Sanghavi, director of equities and a fund manager at Ambit Capital.

Jagannadham Thunuguntla, strategist and head of research at SMC Global, suggested investors to wait for budget without any expectation.

“Frankly speaking, looking at the high fiscal deficit level, we don’t think there would be much in the hands of government to announce lucrative sops. There may be some buying in railway stocks ahead of the Rail Budget. Beyond that, nothing much is expected. The expiry of futures and options contracts will surely make the market choppy,” he said.

Dipen Shah, senior vice-president at Kotak Securities, expects a roadmap for the entry of new private sector banks in the forthcoming budget. “A relaxation in FDI limits, if any, in sectors like retail and defence may also bring in additional revenues. We believe with inflation ruling high, the government may not tinker with the subsidy structure,” he said.

Shah expects the implementation of the direct tax code (DTC) and goods and services tax (GST) from financial year 2013-14 and to that extent, some enabling measures may be announced in the Union budget.

The market can go on either side at F&O expiry, brokerage Sharekhan said in a note.

“On the options front, implied volatility has increased by 100-200 basis points, indicating that the market will remain volatile ahead of the expiry of February series of derivative contracts. A sharp movement in either direction can be expected in the days ahead,” it said.

Sentiments may also be influenced by global markets as major European economies such as the UK and Germany would announce their December quarter GDP numbers this week.

Sensex climbed 482.91 points, or 2.72 per cent, to end the week at 18,211.52. Nifty rose 145.90 points, or 2.80 per cent, to settle at 5,313.05.