Volatile stock markets may drift lower in the upcoming sessions as traders unwind positions due to derivative expiry of March contract and fiscal-year profit booking, say experts.
After closing at 1-1/2 month lows last Friday, benchmark indices are likely to see pressure in absence of any major domestic macro economic data release this week. Investment trends by overseas investors, movement of rupee against the dollar and crude oil would also influence trading, they said.
In the past couple of trading sessions, participants have grappled with weak sentiment on speculation that corporate earnings for March quarter are unlikely to be robust.
“Markets will remain volatile this week as traders roll over and unwind their positions due to derivative expiry of March contract, scheduled on Thursday. Meanwhile, stock prices may remain subdued to weak until the end of the current financial year on March 31, as traders and investors resort to year-end profit-booking,” said Jayant Manglik, President Retail Distribution, Religare Securities Limited.
The next major trigger for the Indian markets is Q4 results of India Inc. The Q4 results season starts during second week of April, 2015.
“Markets are awaiting the 4Q results, which are expected to be subdued,” said Dipen Shah, Head of PCG Research, Kotak Securities.
Over the past week, the BSE benchmark Sensex fell by 242.22 points to settle at 28,261.08.
“We expect the correction to continue in market next week due to March expiry and year-end profit booking by the traders and investors,” said Vijay Singhania, Founder of Trade Smart Online.
“Markets worldwide felt a sense of relief after favourable outcome from FOMC meet. The focus would now once again shift to developments in rupee dollar rates, crude prices. We expect the markets to remain sideways bullish in the coming week,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
Among global market-moving events lined up this week, the Chicago Fed National Activity Index and data on existing home sales for February will be out on March 23.
Markit Economics will announce on March 23 the preliminary reading of China’s HSBC PMI index for March 2015, indicating health of China’s manufacturing activity for that month.