Market Outlook: Growth data, derivatives expiry to drive equity markets

Mumbai: Derivatives expiry, coupled with the direction of foreign funds flow and macro-economic growth data are expected to flare up volatility in the Indian equities markets during the upcoming week.

"The Indian equities markets will be impacted by the upcoming release of FOMC (Federal Open Market Committee) and the RBI`s MPC (Monetary Policy Committee) minutes, as well as the derivatives expiry and the GDP (Gross Domestic Product) figures," said Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services.

While the US Fed`s FOMC and the Resrve Bank of India`s MPC minutes are expected to be released early next week, the derivatives expiry will take place on Thursday, February 23.

According to Devendra Nevgi, Chief Executive of Zyfin Advisors, the equities markets in the coming week will respond to stock-specifics as well as to the foreign and domestic fund flow balance.

"Global markets buoyancy (US) seem to be supportive," Nevgi told IANS.

In terms of investments, provisional figures from the stock exchanges showed massive influx of foreign funds for the week from February 13-17.

The Foreign Institutional Investors (FIIs) purchased stocks worth Rs 531.06 crore, while domestic institutional investors (DIIs) bought scrips worth Rs 1,298.34 crore.

Nevgi pointed out the possibility of profit booking if the Nifty reaches the 8,900 points mark.

"As markets approach the 8,900 levels of Nifty, intermittent profit taking is expected. The local elections, the Trump action traction and Brexit uncertainty are the key global factors to watch," Nevgi said.

Apart from event-based triggers, rupee and global crude oil price movement will influence investors` sentiments, elaborated D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors.

"The movement of rupee against the US dollar and crude oil price movement will dictate the trend of the market going forward," Aggarwal predicted.

On a weekly-basis, the rupee depreciated during the week. It weakened by 13 paise to 67.01 against a US dollar from last week`s close of 66.88.

Aggarwal elaborated that the Nifty was expected to trade in the range of 8,700-8,950 points, while the bank Nifty is expected to trade in between 20,000-21,000 points level.

Besides, the last of corporate earnings for the third quarter of FY 2017 will influence investors` sentiments.

"Investors will focus on upcoming quarterly results from Ambuja Cements which is scheduled to announce December quarter earnings on Monday. Castrol India will announce December quarter results on Tuesday," said Vijay Singhania, founder and Director of brokerage firm Trade Smart Online.

On the global front, key data points such as Eurozone and US preliminary Markit PMI (Purchasing Managers` Index) composite figures for February 2017 will be other major themes.

On technical-levels, the NSE Nifty`s maximum upside could be limited up to the key resistance levels of 8,900-8,925 points for next week.

"The decline below the immediate support of 8,700 points levels could possibly trigger for fresh weakness in the market," said Deepak Jasani, Head of Retail Research with HDFC Securities.

Last week, the key domestic indices made gains of around half a per cent each, as a rally in financial sector stocks and a massive influx of foreign funds kept investors` sentiments upbeat.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE gained 143.50 points or 0.47 per cent to close at 28,468.75 points.

Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) rose by 28.15 points or 0.32 per cent to 8,821.70 points.

The Indian equity markets will remains shut on Friday, on account of Mahashivratri.