Equity markets may witness volatility in week shortened by holidays, say analysts
Analysts also said that the surge in COVID-19 cases might contribute to the volatile trend. Markets will remain closed on Monday for Holi and on Friday for Good Friday
New Delhi: Equity markets may witness a volatile trend in the holiday-shortened week ahead and would be majorly driven by the COVID-19 situation in the country and global cues, analysts said.
Markets would remain closed on Monday for Holi and on Friday for Good Friday.
"Investors would keep a close eye on coronavirus situation and movement of the US bond yield," said Satish Kumar, Research Analyst, Choice Broking.
Last week, the 30-share BSE benchmark Sensex declined 849.74 points or 1.70 percent.
Rising COVID-19 cases in the country have dented market sentiment of late.
"This week is a truncated one as far as Indian markets are concerned due to couple of holidays (Monday-Holi, and Friday-Good Friday), hence traders would watch the global cues closely," said Siddhartha Khemka, head of Retail Research, Motilal Oswal Financial Services.
Nirali Shah, head of Equity Research, Samco Securities said, "With no major events in this week, markets may continue to remain volatile especially because of rising cases."
Besides, auto stocks would remain in focus amid sales data announcement.
Bourses would also track Brent crude, movement of rupee and investment pattern of foreign institutional investors.
"Market was in a consolidation stage due to fear of the second wave of COVID-19 and high valuation. The stability in the market depends on the pace of vaccination and fourth-quarter results," said Vinod Nair, Head of Research at Geojit Financial Services.
India VIX settled at 21.84 levels. BSE Smallcap and Midcap indices fell between 0.5 and 0.8 percent. Auto was the biggest drag. Banking was the top gaining sector
Midcap and Smallcap indices also ended in losses. Oil & gas were the top gainers, while IT was the biggest drag
Weak global trends and persistent foreign fund outflows coupled with rising crude prices led to domestic markets snapping their three-day positive streak. However, they bounced back on the back of gains in oil & gas, metal, and auto sectors.