Stock markets would be volatile in the near term due to the upcoming expiry of futures and options (F&O) on December 24, according to analysts and brokers.
The week ended December 19 was a also volatile one for the markets. The benchmark Sensex of the Bombay Stock Exchange closed up 0.08% for the week with fluctuations in the rupee and uncertainty in Russia afecting equity markets as well. The benchmark Nifty of the National Stock Exchange (NSE) gained 0.01%. Both the exchanges had registered declines on the first three days of the week.
The total turnover of the BSE was Rs 17,034 crores while that of the NSE was Rs 87,041.48 crores.
“The focus will be on stocks and sectors which will see long rolls to January F&O contracts,” said Gaurang Shah, vice president, Geojit BNP Paribas. “The speed of divestment by the government can gather momentum as the budget nears and targets need to be achieved. This will keep a check on liquidity,” Shah said.
However, the overall picture for 2015 was positive as India is being seen as an important investment destination and the sentiment for investing in Indian shares is positive as well, according to reports by international brokerages.
Dipen Shah, senior vice-president, research, Kotak securities underlined that reform measures by the government ahead of the budget were a determining factor for the markets. “Quarterly results and Reserve Bank of India’s policy review will also be important factors,” he added. Analysts also said that the markets would keep a close watch on the values of the rupee and brent crude.
“In our view, one will see recovery in the markets after the recent sell-off, but the recovery will be shallow and will see supply coming at higher levels for some time,” said Shah.