Volatility ahead of F&O expiry may keep markets on edge

Markets may see volatile trading sessions amid derivatives expiry, while muted FII activity and global markets will dictate market trend this week, say experts.

There is no major economic event in global as well as domestic sphere and this in turn, would keep the overall market range-bound. Moreover, the holiday spirit is expected to keep the market muted on account of less volume on the FII counter.

"We are expecting selling pressure to remain sidelined next week as FIIs are likely to remain in party mood for Christmas and New Year. FIIs have of late emerged as net seller in the market," Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments said.

Meanwhile, cash crunch is likely to reduce post December 31, and this can translate into some recovery in the short term in the equity markets, experts believe.

Market movement next week will largely depend on global market trend and trading activity of foreign and domestic institutional investors.

"Globally, US unemployment claims and Crude Oil Inventories data scheduled to release this week is going to be key. Domestically, this week Foreign Reserves data and External Debt Q3 data are scheduled to release," Rohit Gadia, Founder & CEO, CapitalVia Global Research said.

He further added that the market will be struggling to move above the key level of 8,000. "If this is the case, we expect the market to find downside momentum," he added.

Meanwhile, Angel Broking in a research note said, "Traders are suggested to remain light in Index and prefer stock specific approach to trade as of now." For the week ended December 23, the Sensex lost 448.86 points, or 1.69 per cent, while the broader NSE Nifty dropped 153.70 points, or 1.88 per cent.