Expiry Day Volatility Seen as Nifty Remains Rangebound: Analysts
The Indian equity market has been witnessing a stalemate in recent days, with the Nifty 50 index struggling to break out of its tight range. After a marginal gain on Wednesday, analysts are predicting increased volatility on expiry day, advising investors to be cautious and watch for a breakout.
On Wednesday, the Nifty 50 index managed to snap a three-day losing streak, ending marginally higher. The rebound, however, did little to alter the broader technical picture as the index remains within a tight 24,500 to 25,200 range. This range-bound behavior has been a characteristic of the Nifty in recent times, with the index oscillating between these levels without making any significant move.
Analysts are attributing the range-bound behavior to a lack of directional cues from global markets and a wait-and-watch approach from investors. “The Nifty is in a tight range, and we don’t see any significant breakout happening in the near term,” said a technical analyst at a leading brokerage firm. “The index is likely to remain range-bound until there is a clear direction from global markets or domestic events drive the market.”
The expiry of derivatives contracts on Friday is likely to add to the volatility, as investors and traders square off their positions. Analysts are advising investors to be cautious and watch for any sudden movements in the market. “The expiry day is likely to see increased volatility, and investors should be prepared for some wild swings in the market,” said a derivatives analyst at a leading bank.
The Nifty 50 index has been trading in a tight range for the past few weeks, with the index oscillating between 24,500 and 25,200. The range-bound behavior has been attributed to a lack of directional cues from global markets and a wait-and-watch approach from investors. The index has been consolidating after a sharp rally in the previous quarter, and analysts are expecting a breakout from the range once the market gets a clear direction.
The broader market has also been trading in a tight range, with the Nifty 50 index outperforming the broader market indices. The Nifty 50 index has been trading at a premium to the broader market indices, indicating that investors are willing to pay a premium for quality stocks.
In terms of sectoral performance, the Nifty 50 index has been led by the IT and pharma sectors, which have been trading strong. The IT sector has been driven by a strong dollar and a pickup in demand from the US, while the pharma sector has been driven by a rebound in demand and improving earnings.
On the other hand, the financials and consumer discretionary sectors have been underperforming, driven by concerns over the impact of the pandemic on the economy. The financials sector has been driven by concerns over the impact of the pandemic on the economy, while the consumer discretionary sector has been driven by concerns over the impact of the pandemic on consumer spending.
In conclusion, the Nifty 50 index remains range-bound, with analysts predicting increased volatility on expiry day. Investors are advised to be cautious and watch for a breakout from the range. The index has been consolidating after a sharp rally in the previous quarter, and analysts are expecting a breakout from the range once the market gets a clear direction.
