Analysts said stock markets may face volatility in the holiday-shortened week amid global factors and foreign fund trading activity besides expiry of monthly derivatives.
Markets to track factors in holiday week
Movement of global oil benchmark Brent crude and factors like rupee will also guide the trend in equities.
Markets will remain closed on Thursday for Ram Navami.
“While volatility may increase at the local level ahead of the March futures and options (F&O) expiry, positions from major international banks will continue to play an important role in market direction globally.
“Market will also keep an eye on the geopolitical situation as there is still tension between Russia and Ukraine and some tension is also developing between US and Syria. But, market is not paying much attention to it. Due to FII” Santosh Meena, Head of Research, Swastika Investmart Ltd said, “Aggressive selling in recent months, institutional inflows will also be important.”
Last week, the BSE benchmark fell 462.8 points or 0.79 per cent, while the Nifty slipped 155 points or 0.90 per cent. Both the benchmarks closed in the negative territory for the third consecutive week.
Meena said the three major factors contributing to market volatility were the global banking crisis, rate hikes by the US Federal Reserve and finance bill amendments.
“This week is a low holiday and we expect volatility to remain high due to the scheduled expiry of March month derivatives contracts. Besides, global cues, foreign inflows and volatility in crude oil may lead to further choppiness said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.
Global markets have been volatile amid concerns of turmoil in the banking sector and uncertainty over whether the Federal Reserve and other central banks will raise interest rates further.
Siddharth Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd., said this week will see further increase in volatility due to monthly F&O end.
Deepak Jasani, head of retail research at HDFC Securities, said that global markets were mostly lower on Friday as concerns about the recent turmoil in the banking sector kept markets reeling amid fears of an economic slowdown. .
Markets in Asia and Europe closed down on Friday.
“Market volatility is expected to continue in the short term as the global banking system is yet to fully recover from the crisis, especially in Europe. Apart from the banking sector, IT stocks also witnessed selloff on fear of muted deal win Vinod Nair, head of research, Geojit Financial Services, said, “From the BFSI segment in western markets.