Stock markets may face volatility in a holiday-shortened week ahead due to the scheduled monthly expiry of derivatives contracts. Analysts have stated that global trends will continue to influence trading at the benchmark indices. The movement of monsoon and trading activity of Foreign Institutional Investors (FIIs) will also be closely watched. Equity markets will be closed on Wednesday for the Bakri Id holiday.
Santosh Meena, Head of Research at Swastika Investmart Ltd, stated that the market is expected to lack clear cues at the beginning of the week, but volatility may increase as traders roll over their positions with the expiry of June’s F&O contracts.
Meena also mentioned that the movement of monsoon will be crucial on the domestic front, and fortunately, it is gaining momentum. In global markets, investors will closely monitor the movement of crude oil prices, the dollar index, and the US bond yields.
Ajit Mishra, SVP – Technical Research at Religare Broking Ltd, highlighted that the scheduled expiry of June month derivatives contracts this week may contribute to higher volatility. Mishra also emphasized that the performance of broader indices will be in focus after a period of profit-taking.
Last week, global equities experienced a bearish trend and concerns over rate hikes by central banks unsettled investors. Vinod Nair, Head of Research at Geojit Financial Services, stated that central banks worldwide are currently focused on addressing inflation, resulting in hawkish commentary from the Fed Chair and rate hikes by central banks. Despite global concerns, Nair believes that the domestic market is unlikely to undergo a significant correction due to favorable domestic economic indicators and a correction in international commodity prices.
In the previous week, the BSE benchmark fell 405.21 points or 0.63 percent, reaching its record intra-day peak of 63,601.71 on Thursday. Profit-taking in the US markets impacted the market’s tone and triggered a decline in the final sessions, according to Mishra.
Arvinder Singh Nanda, Senior Vice President at Master Capital Services Ltd, stated that global and domestic cues, trends in global markets, crude oil prices, and investment by FII/DII will be the key factors driving the market.