Investors are preparing for more pains as the new trading week begins on Monday. While the record high crude prices and rising inflation will weigh on the market when trading begins, what is most disturbing for investors is the sharp decline in leading US indices on Friday. In addition, sensex's 5.2% loss last week will affect investor sentiment, market players said.

On Friday, spooked by a multi-year high unemployment rate in the US, combined with crude oil prices nearing the $140-per-barrel-mark, the Dow Jones lost nearly 400 points (3.1%).

The other two leading indices Nasdaq and S&P 500 too ended around 3% down. And most Indian ADRs (American Depository Receipts) listed on US bourses too showed sharp declines. Market players feel the decline in US indices could severely affect trading sentiment across Asia, including India, when markets open on Monday morning.

In India, foreign funds could again start selling in large chunks, institutional dealers said. FIIs (foreign institutional investors) have already taken over $4.2 billion out of the Indian stock market and dealers feel the outflow could continue till global markets stabilise.

Market sentiment will also be hit by rising inflation, the latest figure pegging it at 8.24%, and the government's ineffectiveness in curbing it. With the government finally deciding to raise petro-product prices after postponing it for sometime, the rate of inflation, for the week ended June 6, is expected rise further. The prospects of further rise in inflation rate is expected to hold back investors from buying aggressively in the market, participants said.

Technically, chartists and analysts said, the sensex could soon go below the 15,000 mark and go further down. Also a look at the weekly volatility in the sensex, measured by the difference between the week's high and the low, shows that it had gone up to as high as 1,319 points, almost close to its March levels.

Compared to this, the week before the volatility was 470 points. Market analysts said higher volatility indicated investors' impatience with the market. And in case of a sliding trend, this could be a signal that even those with greater holding power and withstand losses, might step in to sell.

And in case RBI decides to hike key rates to rein in inflation, it could take further toll on market.