New Delhi: Trading in stock markets is expected to remain volatile in a holiday-shortened week amid expiry of the futures and options derivative contracts, say analysts.
Besides, investors will continue to monitor developments on the political front, after last week's withdrawal of support by the DMK from the ruling UPA coalition government.
On the global front, investors will watch developments in Cyprus.
Situation may turn volatile if Cyprus is unable to raise the 5.8 billion euros necessary for a 10 billion euro bailout package by Monday, an expert said.
"A soft rally could be round the corner if Cyprus manages to strike a bailout deal with European Union. But, even if Cyprus finds a solution, direction will also be guided by F&O expiry on Thursday," said Vikas Jain, Founder, Aditya Trading Solutions (ATS).
Besides, the bloodshed in mid and small-cap space may continue to be a concern amid huge sell-off seen during past few weeks, he added.
Stock markets will remain shut on Wednesday and Friday on account of 'Holi' and 'Good Friday', respectively.
"With no major data coming out next week and it being a holiday-shortened week, markets will look out for liquidity flows and cues from international markets. Political overhang remains, but expect some value-based buying in the stocks which have seen deep correction," said Milan Bavishi, Head Research, Inventure Growth and Securities.
According to K Subramanyam, AVP (Institutional Research) of Asit C Mehta: "Going forward several doubts will be raised in the minds of investors as to how the government will go ahead with reform process, whether the disinvestment process will go through smoothly and reaction of FII's who have been primarily driving the rally in the past 7-8 months."
Last week, the 30-share Sensex plunged by about 692 points, while 50- scrip Nifty nosedived 221 points to register their biggest weekly fall this calender year.
Domestically, the sentiment was hit after DMK withdrew support over the issue of alleged human rights violations of Tamils in Sri Lanka.
Global sentiment also remained weak as a solution for the Cyprus issue continued to prove elusive.