Markets to remain volatile: Experts

Stock markets are expected to remain volatile this week in view of derivatives contract expiry, besides foreign fund outflow, decline in rupee and the US Fed’s monetary stimulus exit plan may lead to jittery investor sentiment in the near-term, experts said.

The June futures and options contracts expire on June 27. In line with the trends observed over the past few trading sessions, the buying activity of FIIs and domestic currency movement will be in focus.

“Expect the markets to remain jittery this week as FIIs continue to pull out heavily from Indian debt and equities in line with rupee’s decline against dollar. Fed’s decision to start pulling back stimulus later this year has knocked the breath out of markets,” the founder of Aditya Trading Solutions, Vikas Jain said.

Investment activity of foreign institutional investors (FIIs), trend in global markets and rupee movement will remain in focus, another analyst said.

The BSE benchmark Sensex fell by 2.1 per cent to close the week at 18,774.24 on Friday.“Going forward, apart from derivative expiry, there are no other major events next week. So, now the focus is expected to shift back to USD-INR. The street will watch out for liquidity flow,” CMD of Inventure Growth & Securities, Nagji K Rita said.

Another analyst, Jayant Manglik, President Retail Distribution, Religare Securities said: “With expiration of F&O contracts this week, we expect marginal recovery from current levels but markets are in for stock-specific volatility.”

Sanjeev Zarbade, Vice President-Private Client Group Research, Kotak Securities, said that it is testing time for the markets. 

“We are of the opinion that, liquidity flows may likely taper down over a period of time. This could be testing time for India’s economic fundamentals. We continue to maintain that, for India, fiscal reforms in core sectors like infrastructure will be very important for the growth rates to revive and for more foreign money to flow in,” he said.