Investors will be happy at the opening up of the economy from Monday but market mood would be volatile on account of the disappointing growth data and tensions between the US and China, analysts said.

The Union government on Saturday announced “Unlock-1” which will come into effect from June 8. The new relaxed rules will see the opening up of shopping malls, restaurants and religious places. While there are no restrictions on offices, the Centre has said as far as possible the practise of work from home should be followed.

“With economic activities gradually picking up, that should be a comforting factor for the markets,” an analyst with a domestic brokerage said.

He said the spike in the number of coronavirus cases, concerns about economic growth during this fiscal, fears of a spike in bad loans in the banking system and the strained relations between the US and China are likely to cap any gains.

Apprehensions about growth rose with the announcement of GDP data after market hours on Friday that showed growth slipping to 3.1 per cent in the January-March quarter of 2019-20 as the Covid-19 pandemic showed its impact. During fiscal year 2019-20, the domestic economy grew 4.2 per cent against 6.1 per cent expansion in 2018-19.

Economists are of the view that though the fourth quarter growth number was better than expected the road will be bumpy in the current fiscal. Several analysts have projected the economy will contract.

“Looking ahead, we expect GDP growth to plunge to -18.2 per cent year-on-year in the second quarter (April-June). While partial relaxations are underway, India’s Covid-19 curve continues to rise and increased economic activity risks even higher infections,” a note from Nomura said.

“Moreover, we expect the after-effects of soft corporate profits, sluggish jobs market and weak financial sector balance sheets to result in sub-par recovery in the second half of 2020, once the pent-up demand phase is behind,” Nomura said.

“The Nifty at 9580.30 is above 9500 and if it is able to sustain those levels it can go up to 9800. However, there are no reasons for the rally to sustain, and investors are advised to remain cautious. Economic data and its commentary, and the new lockdown norms, based on the spread of infections, can have an impact on the markets,” Vinod Nair — head of research, Geojit Financial Services said.