Mkt headed into rough weather; 5000 on the horizon: Expert

It was a tug of war between bulls and bears throughout, and the bulls came out on top at the end of the week. But it is still too early to celebrate, as news flow from all corners give little hope for further gains.

The industrial output number for June came in much below expectations, wiping out all hopes that the Indian economy was on its way back to stability. Furthermore, deficit monsoons have sparked fears that inflation could rear its ugly head again. Add to the mix GDP forecast downgrades by ratings agencies, and sentiment in the country is at a low.

But there is a ray of hope in between all the negative data. With P Chidambaram heading the Finance Ministry, hopes are that we will see much needed action on reforms soon. On the back of this, the Sensex and Nifty gained more 2% over the week.

For the day, however, the indices slipped marginally to end in the red . The Sensex closed at 17,557, and the Nifty at 5,320.

According to Dilip Bhat, joint managing director of Prabhudas Lilladher, all the negative news indicates that the market will not be able to sustain beyond 5,500. “These are typical bear market rallies, and so they are not sustainable. The market will settle down around 5,000 and maybe lower than that soon,” he said.

So buckle up, because we may be headed into some rough weather.

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Below is an edited transcript of Dilip Bhat's intervew with Udayan Mukherjee and Sonia Shenoy.