Mumbai, May 27 (IANS) After marked volatility in Indian equities markets because of squaring of futures position and irritants in margins trading, traders expect range bound trading in the week ahead with all eyes on the progress of monsoon.

The key 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) had a roller-coaster ride during the week ended Friday with wild fluctuations both ways, but managed to end Friday on a positive note.

The index closed at 10,809.35 points to end with a gain of 143.03 points or 1.34 percent over the previous day's close at 10,666.32 points. But on a week-on-week basis, the bellwether index remained in the red.

The Sensex was down 129.26 points, or 1.18 percent, over the previous week's close and 1,025.67 points, or 8.67 percent, down over the past month - though on a year-on-year basis, it was up a healthy, 4,101.63 points, or 61.15 percent.

Trading during the week had begun on a negative note when the Sensex registered its worst ever fall of over 10 percent, forcing the authorities at both the BSE and the National Stock Exchange to suspend trading for an hour.

This was the first time trading had been suspended momentarily since May 17, 2004.

But a series of statements by Finance Minister P. Chidambaram and the chief of the Securities and Exchange Board of India (SEBI), M. Damodaran, had a sobering effect on the market mood and helped the markets cut down losses.

The index, which had opened on a strong note Monday tanked sharply thereafter to below the crucial, 10,000-point mark but finally closed at 10,481.77 points with a loss of 456.84 points, or 4.18 percent.

Tuesday was positive as the 30-share index closed with a gain of 341.01 points, or 3.25 percent, but slid again the next day with a loss of 249.63 points, or 2.31 percent.

The markets bounced back Thursday with a gain of 93.17 points, or 0.88 percent, which was sustained Friday, but not without some anxious moments that saw the Sensex swing both ways in a range of swing 445 points.

Tata Steel, Cipla, Bajaj Auto, Hero Honda and Infosys Technologies managed to end on a positive note during the week, while Oil and Natural Gas Corp, Wipro, Bharti Tele, Tata Power and Satyam ended with losses.

"One of the main reasons for the fall was some doubt over the liquidity in the markets. The squaring of positions in the futures and options trading also led to some losses earlier in the week," an analyst with a leading brokerage said.

He also attributed the downslide to large-scale selling by foreign institutional investors - which were net sellers to the extent of 1.58 billion during the past five days ended Friday, according to official data.

"But the regulatory authorities did a commendable job in keeping the sanity of the markets intact. The decision two day ago by the bourses to cut the margins in the cash and derivatives segments by half also helped the markets up."

Going forward, the analyst said much of the movement depended on the progress of the monsoon and quarterly results. "Seventy percent of our farmers still rely on monsoon for water, and rising farm income is crucial for a pick up in demand."