The volatility in the stock markets is expected to reduce in the coming week, even as coronavirus scare is likely to keep market sentiment subdued, said an investor. The investors are expected to wait and let the markets settle, said Jimeet Modi, Founder & CEO, SAMCO Securities. “Volatility will reduce substantially and markets may enter a wait and watch mode with some amount of profit booking in certain pockets. Investors are advised to wait and let the markets settle before allocating any meaningful savings to direct equities”, Jimeet Modi also said.
The equity benchmarks — Sensex and Nifty — closed in the red for the first time this week Friday as investors cashed in on recent gains amid subdued global market sentiment due to the coronavirus outbreak. After a lacklustre session, the 30-share BSE Sensex closed 164.18 points or 0.40 per cent lower at 41,141.85. The broader NSE Nifty settled at 12,098.35, down by 39.60 points or 0.33 per cent.
“Now since the budget, RBI policy & major corporate results are behind us, Indian bourses will henceforth try to adjust and assimilate the reality. Before making any meaningful strides, markets will absorb how these policy decisions have impacted corporates’ underlying performance. Going ahead, the overhang of Coronavirus will largely drive the mood of the stocks in the short term”, Jimeet Modi also said.
On a weekly basis, the Sensex surged 1,406.32 points or 3.53 per cent, while the Nifty rose 436.50 points or 3.74 per cent. “While the domestic sentiments are buoyant post an encouraging monetary policy, the threat to the global economic growth due to coronavirus spread may weigh on the sentiments. However, on a positive note, China’s plan to slash tariffs by 50% on some of the US imports indicates diffusing trade tensions which could provide support to the markets in the coming days,” VP, Research, Religare Broking, said.
“Since the start of this month, USD/INR has been on a bearish note amid expansionary budget and RBI policy. Meanwhile, despite China inventing a vaccine to contain the coronavirus, the worries over it spreading rapidly has turned market sentiments mixed. Going ahead, if the number of infected cases increase then it will dent the risk appetite even further, putting downward pressure on Emerging market currencies. Next week, we expect USD/INR to trade within 71-71.60, dollar flows related to Dmart’s QIP may cap the appreciation in spot”, Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services, said.