Equity markets may witness volatility over the next few sessions

NEW DELHI:  Stock markets continued its bull run and ended on record high last week. While BSE Sensex touched the 47,000 mark on Friday and closed at 46,960.69, Nifty ended at 13,760.55.

In the last one week alone, S&P BSE Sensex rallied 861 points or 1.87 per cent while the Nifty 50 was up 1.83 per cent.

Experts feel the positive momentum may hit a pause button in the coming seasons even as external  factors appear to be favorable. 

“The market remained buoyant on earlier-than-expected deployment of Covid-19 vaccines, impending US fiscal stimulus and decreasing domestic Covid-19 cases. FIIs flows though strong have moderated some bit from the previous week. The average daily FII flows in the first four days of the week was Rs 3,200 crore. Going forward, expect FII flows to slowdown in the next two weeks as we head towards Christmas vacation. Markets could turn volatile next week due to the monthly expiry and lesser participation from FIIs,” said Rusmik Oza, Executive VP, Head of Fundamental Research at Kotak Securities.

The brokerage expects Nifty-50 to consolidate between 13,000 & 14,000 levels till the end of this month.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said, “Going ahead, the markets may continue with its positive bias on the back of abundant liquidity, effective vaccine rollout and increasing prospects of a US financial stimulus... However, intermittent profit-booking cannot be ruled out as the Christmas vacation starts this week. Markets could also be volatile given monthly futures and options expiry.”

According to Deepak Jasani, Head of Retail Research, HDFC Securities Nifty ended up for the seventh consecutive week, but the advance-decline ratio has deteriorated over the past two days.

“Hence now there seems to be a need for caution,” he added.