New Delhi: Markets may remain volatile in this holiday-shortened week amid monthly derivatives expiry, quarterly earnings and the upcoming Union Budget, analysts said.
Equity markets would remain closed on Tuesday for the Republic Day holiday.
“Going ahead, markets may continue to remain highly volatile ahead of monthly expiry and Union Budget 2021. The ongoing earnings season which kicked off on a strong note would further add to the volatility. The Fed monetary policy is also due this week,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
The BSE Sensex scaled the 50,000-mark for the first time on Thursday. However, widespread profit booking and weak global cues hit markets and the Sensex tanked 1.5 per cent or 746 points on Friday while NSE Nifty dropped below 14,400 level.
“Sensex@50000 is great news not only for the market and investors but for the economy also. Markets are barometers of the economy with a potential to discount the future. If this is true, the Indian economy is on a strong recovery path.
“If the recovery in growth and corporate earnings, currently underway in India, gathers momentum, the markets may further surprise on the upside. But it is important to appreciate that the market is overvalued from the short- term perspective. At high levels, the market is vulnerable to a correction,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services had said.
Among major earnings to focus on this week are from UCO Bank, Axis Bank, Bank of Baroda, Canara Bank, Hindustan Unilever Limited, Lupin, Maruti Suzuki India and Tata Motors.
“Going ahead, the key trigger would certainly revolve around high hopes from the Union Budget. Quarterly results would propel volatility in bourses,” Nirali Shah, Senior Research Analyst, Samco Securities said.
According to Ajit Mishra, VP – Research, Religare Broking Ltd, “Markets will first react to Reliance numbers in early trade on Monday.”
Reliance Industries Ltd on Friday reported a better-than-expected 12 per cent rise in December quarter net profit on improving oil-to-chemical business, strong continued momentum in retail and steady telecom unit Jio.
“The decisions taken in the upcoming Union Budget along with the policies of the new US Government are expected to define momentum in the near term,” Vinod Nair, Head of Research at Geojit Financial Services said.
Last week, the 30-share BSE benchmark dipped 156.13 points or 0.31 per cent.
“We can expect volatility to remain high this week also as there will be the monthly expiry and it will be the last week before the Union Budget,” according to Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities.
