The stock market is likely to remain range-bound with a positive bias this week.

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Market experts said the rise in the rates at which the Reserve Bank of India borrows and lends to commercial banks may bring in some volatility. But it will last only a few sessions as investors had anticipated such a move ever since the petroleum ministry deregulated pricing of petroleum products a week ago.

The June quarter results season, which is set to begin this week, will be the next big trigger for the market.

Vaibhav Sanghvi, a director at Ambit Research, said, “The hike in bank rates by 0.25 basis points may not spook market sentiments. Investors were already expecting such a move from the central bank. Banking stocks may be hit for a few sessions, but they will stabilise quickly. The first quarter results will surely influence investor sentiment while any news on the monsoon front will be the next big trigger,” he said.

“We believe market participants were expecting a rate hike after the government deregulated auto fuel prices. The market was subdued last week and has factored in the trigger much before the RBI announcement. We feel the focus will shift towards Q1 results,” said Kishor P Ostwal, chairman and managing director of CNI Research.

Some analysts feel banks may not raise lending rates anytime soon. “We do not expect banks to raise lending rates immediately. There will certainly be a lag,” said Waqar Naqvi, CEO of Taurus Mutual Fund.

Naqvi said advance tax payments in June suggest Indian companies may show strong results in the June quarter. However, the market may remain range bound over the next few sessions.

RNRL and Reliance Power on Sunday announced a merger through a share-swap in which RNRL shareholders will get one share of Reliance Power for every four shares they hold.

“The combined entity will be worth Rs 53,700 crore. If we go through the swap ratio, we feel RNRL shares, which is hovering at Rs 63, will have to correct to Rs 47 a piece,” said Deven Choksey, managing director and CEO of KR Choksey.

Meanwhile, the rate of inflation for the week ended June 19 plummeted to 12.92 per cent compared with 16.90 per cent in the previous week.

Shardul Kulkarni, a senior technical analyst with Angel Broking, said, “We are positive on the market. Nifty may not fall below 5,100 level.” The Sensex dropped 113.58 points, or 0.65 per cent, last week to end at 17,460.95. The 50-stock index slipped 31.95 points, or 0.61 per cent, to 5,237.10.

“If Nifty falls below 5,200, then it can fall towards 5,150 and 5,074 levels,” said Alex Mathews, head of research at Geojit BNP Paribas.