India equity market heads for volatility
Apart from derivatives expiry, markets to also seek direction from the movement of the rupee
Indian equity markets are expected to witness volatility on the back of derivatives expiry during the upcoming trading week starting today.
“Volatility in the stock markets is expected to be high as traders roll over positions in the futures and options (F&O) segment from the near month March 2017 series to April 2017 series. The near month March 2017 derivatives contract expire on Thursday,” Vijay Singhania, Founder and Director of brokerage firm Trade Smart Online, said.
Apart from derivatives expiry, markets will also seek direction from the movement of the rupee, flow of foreign funds and the fourth quarter results, which will be announced from April 1.
“The important cues that investors will closely follow during the next week would be FIIs (foreign institutional investors) fund inflows in the Indian equity markets as well as the strength of the markets to sustain at higher levels,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, pointed out.
“Investors will closely follow global market sentiments and quarterly results, while price movement of the Indian rupee against the USD [US dollar] will be the crucial factor for market sentiments next week.”
Last week, the Indian rupee strengthened by five paise to 65.41 against a US dollar.
In terms of investments, provisional figures from the stock exchanges showed that FIIs purchased stocks worth Rs37.1 billion during the trade week ended March 24, while domestic institutional investors (DIIs) divested scrip worth Rs25.8 billion (Dh1.4 billion).
Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) bought equities worth Rs51.4 billion, or $786.22 million, during March 20-24.
On the technical levels, Deepak Jasani, Head — Retail Research, HDFC Securities, said: “Technically, though the markets have fallen this week (past), the Nifty remains in an intermediate uptrend with no clear signs of reversal yet.