Stock Markets Set for Holiday Week Lull, Analysts Cite Potential Volatility from Derivatives Expiry

Stock Markets Set for Holiday Week Lull, Analysts Cite Potential Volatility from Derivatives Expiry

Asif Iqbal | December 24, 2023 | 10:09 PM IST | Breaking News | Follow on Google News

Stock Markets Set for Holiday Week Lull, Analysts Cite Potential Volatility from Derivatives Expiry.image/reauters

Stock Markets Set for Holiday Week Lull, Analysts Cite Potential Volatility from Derivatives Expiry

Analysts anticipate a subdued trend in the stock markets during the abbreviated holiday week, with no significant domestic catalysts expected. The monthly derivatives expiry slated for Thursday may contribute to heightened volatility in stock indices. It’s noteworthy that stock markets will be closed on Monday in observance of Christmas.

“With global cues in short supply due to the Christmas holiday, domestic market dynamics are poised to guide sector and stock-specific movements this week,” remarked Santosh Meena, Head of Research at Swastika Investmart Ltd. Given the absence of substantial indicators, Meena highlighted the potential introduction of volatility to the markets with the December F&O expiry.

In the previous week, the BSE benchmark witnessed a decline of 376.79 points, equivalent to 0.52%, while the Nifty dipped by 107.25 points, or 0.49%. This retreat followed a notable surge in the markets, reaching their all-time high levels on December 20.

“While India’s equity market valuation remains expensive, the likelihood of a stable government at the center may keep them elevated. Furthermore, with FPI holdings at a 10-year low and the possibility of foreign buying in the debt market ahead of India’s inclusion in the JP Morgan Emerging Market Government Bond Index, there could be some stability for the INR,” noted Jitendra Gohil, Chief Investment Strategist at Kotak Alternate Asset Managers Limited.

Analysts acknowledged that the markets had been on an impressive streak of setting records, entering an overbought territory. Consequently, occasional interruptions, such as profit-taking, were expected. The week concluded with declines after seven consecutive weeks of gains. “As we embrace the holiday mood, we anticipate markets to remain range-bound with stock-specific actions this week,” said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd.

Investors will closely monitor the global oil benchmark, Brent crude, and the trajectory of the rupee against the dollar in the markets.

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Asif Iqbal

Asif Iqbal is a seasoned news writer with a passion for delivering the latest updates to the public. Currently serving as the senior writer at VoM News, a prominent news outlet known for its comprehensive coverage of diverse topics, Asif has established himself as a reliable source of information. With a keen eye for detail and a knack for storytelling, he consistently provides readers with well-crafted articles that cover a wide range of news categories. His dedication to journalistic integrity and his commitment to staying ahead of the news curve make him an invaluable asset to Vom News, ensuring that readers are always well-informed on the issues that matter most. You can find his work and stay updated on current events by visiting vomnews.in.