Markets may face volatility due to key factors such as derivatives maturity, Q4 results and global trends: Analysts

The Indian market is likely to face volatility in the next week due to the expiration of monthly derivatives, as well as global trends and current quarterly earnings from companies will continue to play a major role in the trading movement, experts noted.

The markets will also closely follow foreign fund movements in the midst of undiminished outflow.

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We expect volatility to remain high in the coming week due to the planned expiration of April’s derivative contracts, said Ajit Mishra, VP Research, Religare Broking in its next week’s stock market expectations.

He added that global signals such as the Russia-Ukraine crisis, China’s COVID situation and the results of the global indices will continue to weigh on sentiment.

On the earnings front, some prominent names like Bajaj Finance, Bajaj Auto, Axis Bank, Hindustan Unilever, Maruti, Ultratech Cement and Wipro will announce their numbers during the week along with several others, the analyst at Religare Broking also said.

In line with Mishra, Santosh Meena, head of research, Swastika Investmart, expected that this week will also start on a gloomy tone amid a sharp drop in the US market on Friday after hawkish comments from the US Federal Reserve and weak earnings.

Global signals may dominate this week along with April’s R & D expiration and Q4 earnings, Meena noted. He said FIIs are constantly selling in the Indian stock market and their behavior will be important due to concerns about aggressive rate hikes in the US.

“Global signals are largely dictating the trend at the moment, as the start of the earnings season has so far not impressed the street. And we believe traders will continue to face tough times due to excessive news flow, causing erratic fluctuations in the markets, “Mishra said in its expectation note.

There is still uncertainty about the war between Russia and Ukraine, whereas the market will also keep an eye on crude oil prices, he said.

“The still persistent war situation in Eastern Europe, likely interest rate cuts from the ECB and also an improved interest rate response from the Fed are factors that will control the markets in the coming week and may also put pressure on prices,” says Joseph Thomas. Head of Research, Emkay Wealth Management, said.

On the index front, Nifty must defend 16,800 levels for any meaningful recovery, otherwise the tone would be more bearish. In the event of a recovery, it would face an obstacle around 17,450 and then 17,700 levels, said Mishra, who proposed limiting overnight leveraged trades and focusing more on themes that show consistency in their trends.

Last week, Sensex lost 1,141.78 points or 1.95 percent, while Nifty lost 303.70 points or 1.73 percent.

“Global signals such as rising Fed comments, rising inflation and bond yields, declining economic growth, protracted war in Ukraine and volatile crude oil prices are keeping markets uncertain. Continuous sales from FIIs and weak results from few heavyweights have added further market pressure,” he said. Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Milind Muchhala, CEO Julius Baer, ​​said investors may prefer to wait for more results to be published and hear the accompanying comments to assess if there are any concerns about earnings cuts creeping in.

“Also the impending concerns about rising commodity prices due to geopolitical situations and supply chain challenges, and with rising expectations of a tougher rise in US Federal Reserve rates, the market may continue to experience higher volatility in the short term,” Muchhala added.

With PTI inputs

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