Markets may remain volatile in truncated week: Experts

This week is shortened by two holidays amid expiry of the futures and options derivative contracts

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 to the ruling UPA coalition government.

On the global front, investors will watch developments in Cyprus.

The situation may turn volatile if Cyprus is unable to raise the Euro 5.8 billion necessary for a Euro 10-billion bailout package by Monday, an expert said.  

“A soft rally could be round the corner if Cyprus manages to strike a bailout deal with the European Union. But, even if Cyprus finds a solution, the direction will also be guided by F&O expiry on Thursday,” said Vikas Jain, founder, Aditya Trading Solutions. Besides, the bloodshed in the mid- and small-cap space may continue to be a concern amid the huge sell-off seen during the 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,” 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 were 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.