Global factors and trading activity from foreign institutional investors are expected to drive the mood in the domestic market this week, while equity benchmarks could experience volatility during the expiration of monthly derivatives, analysts said.
Indian markets have witnessed volatile trades over the past several trading sessions. However, the Nifty managed to break its five-week losing streak, ending with a decent weekly gain of 3 percent, said Santosh Meena, head of research at Swastika Investmart Ltd.
Inflation and slowdown in the global economy means that stagflation is a major concern for global equity markets,” which is why we are seeing relentless selling by FIIs (Foreign Institutional Investors). However, Indian markets are in a better position thanks to support from domestic investors, he added.
“The market may remain volatile this week due to the expiration of May. Globally, the minutes of the FOMC (Federal Open Market Committee) meeting will be released on May 25, which will be a major trigger as the dollar index moves and commodity prices will be other important factors,” Meena said.
Yesha Shah, head of equity research, Samco Securities, said: “The volatility observed last week is expected to persist, taking into account the major economic data to be released, the current earnings season and the monthly expiration. The FOMC Minutes, US GDP growth forecasts and initial unemployment claims will all influence global market sentiment.”
Last week, the Sensex climbed 1,532.77 points, or 2.90 percent, while the Nifty rose 484 points, or 3.06 percent.
“Overall, we expect this volatility to continue this week with several macroeconomic headwinds such as high inflation and aggressive rate hikes. Heavy FII sales also continued, adding further pressure to the market overall,” said Siddhartha. Khemka, head of retail research. Motilal Oswal Financial Services Ltd.
On the earnings front, SAIL, Zomato, Adani Ports, Deepak Fertilizers, InterGlobe Aviation, Hindalco, NMDC, GAIL and Godrej Industries are set to release their quarterly earnings this week.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)