Equity markets could see volatility this week as monthly derivatives come to an end, and global trends, along with ongoing quarterly corporate earnings, should continue to play a major role in trading moves, analysts say.
Markets would also closely monitor the movements of foreign funds amid unabated outflows. This week is also expected to get off to a gloomy start, following Friday’s sharp decline in the US market following aggressive comments from the US Fed and weak earnings.
Global signals may dominate this week, along with the expiration of the M&D months in April and fourth quarter results.
Turning to the fourth quarter results, the market will react to the results of ICICI Bank on Monday, while HDFC Life, Bajaj Auto, HUL, Ambuja Cement, Axis Bank, Bajaj Finserv, Vedanta, IndusInd Bank, Maruti Suzuki, Ultratech Cement and Wipro will be other important results scheduled for this week,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
FIIs are constantly selling in the Indian stock market and their behavior will be important amid concerns about aggressive rate hikes in the US, Meena added.
There are still uncertainties about the war between Russia and Ukraine, while the market will also keep an eye on the price of crude oil, he said.
“The ongoing war situation in Eastern Europe, likely ECB interest rate measures as well as an enhanced interest rate response from the Fed are factors that will steer markets in the coming week and may also put pressure on prices,” said Joseph Thomas. Head of Research, Emkay Wealth Management, said.
Last week, the Sensex lost 1,141.78 points, or 1.95 percent, while the Nifty lost 303.70 points, or 1.73 percent.
“Global signals such as aggressive Fed commentary, rising inflation and bond yields, slowing economic growth, protracted war in Ukraine and volatile crude prices keep markets uncertain. Continued selling by FIIs and weak results by some heavyweights have put further pressure on the market.” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Milind Muchhala, executive director of Julius Baer, said investors might prefer to wait for more results to be announced and hear the accompanying comments to gauge if there are concerns about earnings declines creeping in.
Also, looming concerns about increased commodity prices due to the geopolitical situation and supply chain challenges, and with mounting expectations of a harder hike by the US Fed, the market may continue to see higher volatility in the near term,” Muchhala added. .
Ajit Mishra, VP – Research, Religare Broking Ltd, said markets will react to ICICI Bank data in early trading Monday.
“In addition, global signals such as updates on the Russia-Ukraine crisis and the COVID situation in China will also remain on the participants’ radar,” he added.
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