Stock Market: Powell’s speeches, Covid trajectory, F&O expiry to set tone for market this week

MUMBAI: After a spherical of consolidation, this week is predicted to not supply a lot aid to buyers as volatility will seemingly stay excessive. Buyers are nonetheless grappling with implications of unrelenting rise in international bond yields and Covid-19 circumstances.

Final week, the benchmark indices ended with losses of round 2 per cent. The Nifty50 index has corrected roughly 6 per cent since hitting its all-time highs in February.

“We count on volatility to stay excessive subsequent week because of the scheduled derivatives expiry of March month contracts. In absence of any main occasion, Covid-related updates and efficiency of the worldwide markets will stay in focus,” mentioned Ajit Mishra, vp of analysis at Religare Broking.

That mentioned, listed below are the key elements that can set the tone for the market this week:

Powell’s slew of speeches
The US Treasury bond market was not a lot impressed by US Federal Reserve Chairman Jerome Powell’s post-monetary coverage press convention the place he pressured that the central financial institution will stay accommodative until there’s tangible proof of sustainable development and inflation. Powell will take a number of extra swings at calming the market’s frayed nerves as he has three speeches lined all through this week.

Covid’s trajectory in India
The coronavirus pandemic is rearing its ugly head within the nation as soon as once more with main indicators that India is getting into a a lot stronger second wave led by the one in every of its most affluent states Maharashtra. The seven-day rolling common of latest circumstances has ticked greater at an accelerated tempo in latest weeks. Buyers are involved that fast improve in case hundreds might power governments to undertake lockdowns, which can hamper the financial system’s nonetheless fragile restoration.

Vaccination price
Whereas the rising circumstances is regarding, buyers are nonetheless not a gloom and doom state of affairs due to the continuing vaccination drive within the nation. Nevertheless, market members will preserve an in depth watch on the speed of vaccination, which has to date underwhelmed in comparison with different main economies.

March F&O expiry
The expiry of the March spinoff sequence will carry its personal volatility to the market this week, particularly, within the wake of latest improve briefly bets on the Nifty50 index. Market members will be careful for rollover information as they give the impression of being to gauge the sentiment of merchants heading into the March quarter earnings season subsequent week.

Technical set-up
“If markets stabilise on the present ranges then Nifty can regain its consolidation inside the mentioned vary. However any decisive break from these ranges can take the index additional right down to 14,000 within the quick time period. Merchants ought to preserve applicable stoplosses whereas taking positions as markets are at present standing at essential ranges,” mentioned Nirali Shah, head of fairness analysis at Samco Securities.

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