Markets may face volatility amid derivatives expiry; global trends, earnings major drivers: Analysts

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Equity markets may face volatility this week amid monthly derivatives expiry, and global trends along with the ongoing quarterly earnings by corporates would continue to play a major role in trading movement, analysts said. Markets would also keenly track foreign fund movement amid unabated outflows.

"It is expected that this week will also kick off on a sombre note on the back of sharp fall in the US market on Friday after hawkish commentary by the US Fed and weak earnings. The global cues may dominate this week along with April month F&O expiry and Q4 earnings.

"In terms of Q4 earnings, market will react to the results of ICICI Bank on Monday while HDFC Life, Bajaj Auto, HUL, Ambuja Cement, Axis Bank, Bajaj Finserv, Vedanta, IndusInd Bank, Maruti Suzuki, Ultratech Cement and Wipro will be other key results which are scheduled this week," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

FIIs are continuously selling in the Indian equity market and their behaviour will be important amid concerns of aggressive rate hikes in the USA, Meena added. There are still uncertainties about the Russia-Ukraine war whereas the market will also have an eye on crude oil prices, he said. There are still uncertainties about the Russia-Ukraine war whereas the market will also have an eye on crude oil prices, he said.

"The still persistent war situation in Eastern Europe, likely rate action from the ECB, and also an enhanced rate response from the Fed are factors that will guide the markets in the coming week, and may also put pressure on prices," Joseph Thomas, Head of Research, Emkay Wealth Management, said. Last week, the Sensex lost 1,141.78 points or 1.95 per cent, while the Nifty shed 303.70 points or 1.73 per cent.

"Global cues like hawkish Fed commentary, rising inflation and bond yields, slowing economic growth, prolonged war in Ukraine and volatile crude prices are keeping markets uncertain. Continuous selling by FIIs and weak results by few heavyweights has further added pressure to the market," said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Milind Muchhala, Executive Director, Julius Baer, said investors might prefer to wait out for more results to be announced and hear out the accompanying commentaries to gauge in case there are any concerns of earnings cuts creeping in.

"Also, the impending concerns of elevated commodity prices due to geopolitical situation and supply chain challenges, and with increasing expectations of a harsher hike by the US Fed, the market may continue to witness higher volatility in the near term," Muchhala added.

Ajit Mishra, VP – Research, Religare Broking Ltd, said, markets will react to ICICI Bank numbers in early trade on Monday. Ajit Mishra, VP – Research, Religare Broking Ltd, said, markets will react to ICICI Bank numbers in early trade on Monday.

"Besides, global cues like updates on the Russia-Ukraine crisis, and China's COVID situation will also remain on participants' radar," he added.