NEW DELHI : Indian equity markets are likely to experience volatility this week due to concerns about rising coronavirus cases and expiration of derivatives contracts, analysts said.
Furthermore, progress around the COVID-19 vaccine, related updates, US stimulus talks and global signals would dictate the market trend, traders said.
“Looking ahead, the market is likely to be volatile as sentiments range from fear of an increase in COVID cases globally to optimism about the progress of vaccines. Investors would closely monitor the development of the US stimulus talks, “said Siddhartha Khemka, director of retail research at Motilal. Oswal Financial Services Ltd.
In the future, markets could reach a mid-top with a correction in top-tier stocks. India Inc’s quarterly results have come to a close and markets are likely to be on the lookout for global leads and / or any major vaccine-related updates in either direction, said Nirali Shah, senior research analyst at Samco Securities.
According to Shah, stocks are likely to witness buying episodes in lower-order stocks, suggesting a rebound of recovery.
Sumeet Bagadia, CEO of Choice Broking, said that with the market holding near its all-time highs, stocks are likely to witness volatility in the future.
During the last week shortened by holidays, Sensex rose 439.25 points or 1.01 percent, while Nifty advanced 139.10 points or 1.09 percent.
On Friday, foreign institutional investors (FII) continued to be net buyers in the capital market while buying shares worth ₹Rs 3,860.78 crore, based on interim trading data.
Markets traded some gap-up openings last week due to positive international leads. But soon the optimism faded and fears of a resurgence in coronavirus cases, the dispute for power in the US and the valuable valuations led to a mildly positive weekend.
FIIs, with their enormous liquidity strength, are eventually not buying as aggressively as the first two weeks of November, Shah said, adding that this indicates optimism has peaked.
Global markets are moving cautiously amid an increase in COVID-19 cases and conflicting views on US fiscal stimulus. The overall market momentum going forward will depend on the progress associated with the effectiveness of vaccine distribution, an important factor determining economic recovery, “said Vinod Nair, head of research at Geojit Financial Services.
The market is expected to focus on global events and vaccine development progress as we move towards the end of the earnings season, accompanied by the absence of major domestic events in the coming week, he noted.
Ajit Mishra, Research Vice President at Religare Broking, expects volatility to remain high next week, due to the scheduled expiration of futures and options on the November monthly contracts.
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