Market Next Week: Derivatives expiry, global cues and FII flows among top factors for Dalal Street

The Indian markets shall be influenced by monthly derivatives expiry, global cues, and foreign investors’ flow among others factors in the absence of major events next week, according to several analysts.

They believe the rupee trend against the US dollar and Brent crude’s movement shall also dictate the equity markets in the coming week.

With all the major events behind us, the performance of the global markets, especially the US, will be in focus for cues, Ajit Mishra, VP - Technical Research, Religare Broking said, adding that the crude and rupee movements will continue to offer indications in between.

“We do not expect any surprises from the global front however intermediate consolidation/profit taking in the US markets may continue to trigger volatility in between,” Mishra said in his expectations for the next week from India markets.

The recent underperformance of the banking and financial pack may continue so the participation of other sectors like IT, energy, FMCG and auto could play a critical role ahead, he added.

Global cues and F&O expiry may cause volatility this week, Santosh Meena, Head of Research, Swastika Investmart Ltd said. He added, “Global cues are a little iffy, with strong US job data, higher US bond yields, and the dollar index guiding equity investors' sentiments in the short term.”

Although FIIs have shown some interest in purchasing over the past few days, there were a few block purchases last week, so their flow will be crucial, Meena said in his comment on market next week.

Given that the war will be a year old on February 20, the market will also be keeping an eye on the situation in Russia and Ukraine.

The markets this week continued to trade volatile amid mixed cues and ended with a gain of nearly half a percent. After the initial downtick, Nifty50 and BSE Sensex regained some strength in the middle, tracking favorable global cues and buying in select heavyweights.

However, the profit taking in the final sessions trimmed the gains and both Nifty and Sensex finally settled at 17,944.20 and 61,002.57 levels.

On the sectoral front, buoyancy in the IT and energy heavyweights kept the tone positive while banking and financials were under pressure. Meanwhile, the broader indices underperformed the benchmark and lost over a per cent each.