Market likely to remain volatile in the final week of 2021 amid expiry: Experts
The final week of the calendar year is expected to remain volatile, thanks to the scheduled expiry of December month derivatives contracts. Besides, the updates on COVID cases will further add to the choppiness, says Ajit Mishra, VP - Research, Religare Broking.
The Indian market started the week gone by on a negative note amid rising concern over Omicron variant of coronavirus. Later in the week, in-line with the global markets, the Indian benchmark indices also saw recovery, but remained rangebound and ended the week on flat note amid continuous FII selling. During the week, BSE Sensex was up 112.57 points (0.19 percent) to finish at 57,124.31, while the Nifty50 was up 18.55 points (0.10 percent) to close at 17,003.75 levels.
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Yesha Shah, Head of Equity Research, Samco Securities | Markets will continue to see volatility and whipsaw-like movements as they respond to Omicron-related development and the monthly expiry. The week may see sectoral rotation, with beaten-down industries gaining traction. Because the underlying tone in Realty and Auto is optimistic, a purchase on dips approach can be used. IT is gaining momentum and trading at all-time highs, aided by Accenture's stellar performance. Banks on the other hand, remain weak and are unlikely to see significant buying until the end of the year. Investors can further examine the monthly expiry rollover data to capitalise on sectoral rotation and identify if the Santa Claus Rally will occur.
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Ajit Mishra, VP - Research, Religare Broking | The final week of the calendar year is expected to remain volatile, thanks to the scheduled expiry of December month derivatives contracts. Besides, the updates on COVID cases will further add to the choppiness. The recent volatility indicates caution that the new COVID variant might result in restriction of economic activities as its transmission rate is high despite being less severe. After the initial choppiness, global markets, especially the US, are settling now however it’s not the case in our markets yet. We advise maintaining a cautious approach and waiting for further clarity. On the index front, a decisive close above 17,150 in Nifty would help the index to inch further higher else profit taking would resume. Traders should keep a close eye on the banking index for cues.
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Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | Structurally, the recent bounce looks matured at 17155 & the Nifty can slide down towards its daily lower Bollinger Band, which is near 16700. Overall, short term consolidation is expected in the range of 17155-16700
Prashant Tapse, Vice President (Research) at Mehta Equities | Technically, the 17159 mark retains its tag of a key hurdle. Aggressive buying is advised only above the 17159 mark. Alternatively, expect a waterfall of selling below the Nifty 16663 mark with aggressive downside risk at the 15907 mark.
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Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | The index is still holding at a lower top formation, which indicates medium term weakness. In addition, on weekly charts, the index has formed a long leg bullish candle that shows continuation of a pullback rally in the near future. While the intraday texture of the market is bullish, the 20 day SMA and 17250 level could act as an important hurdle for the market. Trading set up suggests that before a fresh breakout, the index is likely to consolidate within the range of 16800 to 17250 levels.
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Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | FII selling has reduced sharply over the last few days due to the festive holidays. After around 10% correction, Nifty is now trading at 19x FY23 P/E and is no longer in the expensive zone. While the relief rally might continue for some more time, volatility cannot be ruled out on account of potential risk from Omicron variant and fragile global cues. We suggest long term investors to take benefit of such volatility in the market and add on to their portfolios gradually at lower levels.
