A road sign is seen next to Bombay Stock Exchange (BSE) building in Mumbai
A road sign is seen next to Bombay Stock Exchange (BSE) building in MumbaiREUTERS/Danish Siddiqui

The week is likely to remain range-bound because of a host of uncertainties, domestic and global, even though the benchmark indices rallied smartly on Monday, according to some analysts.

Sensex rose 373 points to close above 35,354 and Nifty gained 101 points to close above 10,628.

The nation is in the midst of elections to five states. Of them, Madhya Pradesh, Rajasthan and Telangana are key states where pitched battles are on. These are prestigious battles for the Narendra Modi-led Bharatiya Janata Party which head the ruling National Democratic Alliance. The election results will not be out until December 11 and the market is watching for cues from voting percentage and the optics in general.

The trading week of November 26-30, being the last week of the month is also the expiry week for futures and options. The Street will be watchful for the open positions build-up for making further commitments.

The market is in the midst of a promising earnings season and some hope its effect will continue to linger. However, the market would have already priced in the good manufacturing numbers restricting further price movement ahead.

A further softening of the international crude prices will buoy the Indian market even further despite the domestic uncertainties. Though the oil took a pause on Monday after last week's rout, a lower crude price and a lower dollar will be a double bonus in the week ahead because India's revenue account deficit could ease further. The easing oil will have a significant impact on the market, considering the lower fuel prices and macroeconomic benefits, market experts believe.

Opec production cut

"It is difficult to say whether $60 is the new normal, as there doesn't seem to be a 'normal' at the moment," Reuters quoted Cantor Fitzgerald oil and gas analyst Jack Allardyce as saying.

"The recent weakness seems dramatic given the lack of actual catalysts – it seems to have been driven by a wider impending sense of doom amidst weak equities, geopolitics, subsequent softening demand and increasing supply," he told the news agency.

The effect of the looming Opec production cut and vanishing Iran oil as the grace period given to eight countries including India ends will continue to roil the market, according to some experts.

Significantly, the International Energy Agency has pegged down its global oil demand growth rate estimate to 1.4 million barrels per day from June's 1.5 million bpd. The demand for 2019 is expected to top off at 100 million barrels.