Sensex, Nifty flat, volatility to remain high ahead of monthly expiry

Equity benchmarks the Sensex and the Nifty started February 28 on a flat note amid mixed global cues. Analysts expect volatility to continue ahead of the monthly expiry but do see the possibility of the Nifty hitting a new high.

The Sensex was trading at 73,128 and and the Nifty at 22,212. India VIX, which measures volatility, gained to move above 15 level.

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"Traders seem to be awaiting a catalyst for a momentum shift, and the next significant movement will likely occur once this range of 22,000 - 22,300 is breached on a sustained closing basis. Until then, traders may opt to pursue a buy-on-dip strategy ahead of the monthly expiry," said Sameet Chavan, Head Research, Technical and Derivative - Angel One.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services also expects markets to remain rangebound in the near-term. "The present range-bound consolidation phase is likely to continue for some time in the absence of strong positive or negative triggers. The market resilience will be supported by strong stocks like RIL, Bharti, and auto stocks particularly Tata Motors, M&M and Bajaj Auto which have emerged as strong leaders in this phase of the market," he added.

Broader markets also traded on a positive note within the first hour of trade as Nifty Midcap 100 and Nifty Smallcap 100 indices climbed up to 0.3 percent.

Barring Nifty Auto and Realty indices, all other sectors traded in a positive note. Nifty Metal and Consumer Durables gained the most - up to 0.6 percent.

Global markets mixed; US inflation report eyed

Globally, US markets ended mixed overnight as investors look ahead to key inflation report later this week. The retail inflation report will guide US Federal Reserve's towards the timing of interest rate cuts.

While Dow Jones declined 0.2 percent, tech-heavy NASDAQ Composite and the S&P 500 indices gained up to 0.3 percent.

Asia-Pacific markets were also mostly lower this morning as Japan's Nikkei 225, Australia's S&P 200 traded flat, whereas Hong Kong's Hang Seng index dropped 0.2 percent.

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