Stock markets likely to face volatility, global factors must remain front and center: analysts

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NEW DELHI: Equity markets are expected to experience volatility this week due to monthly derivatives expiry, the ongoing Russian-Ukrainian conflict and high crude oil prices, analysts said. Geopolitical tensions and supply-side concerns will continue to dominate investor sentiment, they added.
“This week we will have the March F&O expiration which may give some direction to this limited market. continue to cause volatility in global markets.
“Crude oil prices have risen slightly again due to geopolitical issues and supply side concerns and if they strengthen further, it could be a cause for concern for Indian stock markets,” Santosh said. Meena, Head of Research at Swastika Investmart Ltd.
According to market analysts, the scheduled monthly expiration of derivatives contracts in March will keep volatility high this week.
“Participants will also be watching auto sales data from April 1. Globally, updates on the Russian-Ukrainian war and its impact on global markets and crude movements will remain at the center of the concerns,” said Ajit Mishra, Vice President of Research, Religare Broking, mentioned.
The movement of the market would also depend on the movement of the Rupee and the investment pattern of Foreign Institutional Investors (FIIs).
After two weeks of straight gains, benchmarks Sensedx and Nifty fell nearly 1% amid no signs of de-escalation between Russia and Ukraine and hawkish statements from the US Fed.
Among the sectors, metal was the main gainer, followed by IT and pharmaceuticals. On the other hand, FMCG, Banking and Automotive were the big losers.
Broader indices outperformed overall, with mid and small cap indices finishing up 1% and 0.2% respectively.
The expected monthly expiration of March derivatives contracts would keep volatility elevated into next week.
In addition, participants will also be watching auto sales data from April 1. On the global front, updates on the Russian-Ukrainian war and its impact on global markets and crude movements will remain in focus.
Yesha Shah, head of equity research at Samco Securities, said: “At-home volatility would be the main guideline as the last monthly expiry for this fiscal year is scheduled for this week.”
Analysts added that markets were showing resilience amid uncertainty, but deteriorating global sentiment could turn the tide again.
“The domestic market will continue to follow global developments. The end of the war and increased oil supply may help India maintain resilience, otherwise high volatility will be a short-term concern,” said Vinod Nair, Research Manager. at Geojit Financial Services.
Milind Muchhala, Chief Executive of Julius Baer, ​​said: “Indian equity markets continue to struggle, influenced and reacting to the increased flow of news on the global front, particularly in relation to the geopolitical situation and Fed rhetoric. The two main and controllable challenges for the markets in the near term are continued inflationary pressures and rising bond yields.”
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