Volatility ahead as F&O expiry may keep markets on edge

Derivatives expiry is expected to keep stock markets volatile this week despite no major immediate trigger while global cues and overseas capital inflows will continue to steer sentiment, say experts.

"In absence of any major domestic clues and expiry of derivative contracts, stock markets this week are expected to be volatile. The near-month September derivatives contracts will expire on Thursday," said Vijay Singhania, founder Director, Trade Smart Online.

Interest-rate sensitive sectors may see some action ahead of the monetary policy.

"The RBI meeting in early October will be closely watched for any rate cut," said Dipen Shah, Senior Vice-President and Head, PCG Research, Kotak Securities.

Movement of the rupee against the dollar and crude oil price will also be on investors' radar.

"Due to F&O expiry, market could witness higher than normal volatility this week," said Rohit Gadia, founder and CEO, CapitalVia Global Research.

Equities posted their third weekly gain in four as the Sensex and the Nifty gained 69.19 points, or 0.24 per cent, and 51.70 points, or 0.58 per cent, respectively.