August contract expiry may keep market volatile, but US adds cheer

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Mumbai, Aug 24 : With rising inflation and instability in the global crude prices, coupled with the expiry of August derivatives contract due next week, key Indian equity markets are expected to remain volatile throughout the week. Dealers in the market say that, with the inflation touching at 12.63%, some more measures may be taken by the Reserve Bank of India (RBI) in the coming days to control inflation.

However, the dealers also added that the positive closing of the US markets last week on the back of easing of crude prices might have a positive impact on the markets on the opening day of the week.

On Friday, the S&P 500 Index added 14.48 points, or 1.13%, and closed at 1,292.20. The Dow Jones Industrial Average rallied 197.85 points, or 1.73%, before ending at 11,628.06. The Nasdaq Composite rose 34 points or 1.4% to end at 2,414. US light crude oil for October delivery fell $ 6.59 or 5.4% to settle at $114.59 per barrel on the New York Mercantile Exchange on Friday.

On Friday, the last trading day of the past week, the 30-share Sensex of Bombay Stock Exchange (BSE) had gained 157.76 points or 1.11% before closing the day at 14,401.49 points. While S&P CNX Nifty of National Stock Exchange (NSE) had added 43.60 points or 1.02% before ending the day at 4327.45 points.

Hitesh Agarwal, head of Research at Angel Broking said, “We assume the markets are going to remain volatile for the next week too on the back of August derivatives contract expiry. The worries on inflation and crude prices too might impact the sentiment.”

Last week, the Sensex had lost 322.96 points or 2.19% and had closed at 14,401.49 points on Friday. The Nifty was also down by 103.25 points or 2.33% and ended at 4,327.45 points on Friday.