Expiry Day Volatility Seen as Nifty Remains Rangebound: Analysts
The Indian stock market has been experiencing a rollercoaster ride in recent weeks, with the Nifty 50 index fluctuating wildly. On Wednesday, the index managed to snap a three-day losing streak, ending marginally higher. However, the rebound did little to alter the broader technical picture as the index remains within a tight 24,500 to 25,200 range. Analysts are now expecting volatility on expiry day and advising investors to watch for a breakout.
The Nifty 50 index, which is a widely followed benchmark of the Indian stock market, has been trading within a tight range for several weeks now. The index has been stuck between 24,500 and 25,200, with limited upside and downside movements. This lack of direction has led to increased volatility, with the index experiencing sharp fluctuations in recent weeks.
Analysts are attributing the current range-bound behavior of the Nifty 50 index to several factors. One of the main reasons is the lack of clear direction from global markets. The global economy is experiencing a slowdown, and this has led to increased uncertainty among investors. Additionally, the Indian rupee has been under pressure, which has also contributed to the lack of direction in the market.
Another factor that is contributing to the range-bound behavior of the Nifty 50 index is the lack of clear guidance from the Reserve Bank of India (RBI). The RBI has been maintaining a neutral stance on interest rates, which has led to increased uncertainty among investors. Additionally, the RBI’s decision to keep interest rates unchanged has also contributed to the lack of direction in the market.
Despite the lack of clear direction, analysts are expecting volatility on expiry day. Expiry day is a day when stock options and futures contracts expire, and this can lead to increased volatility in the market. Analysts are advising investors to watch for a breakout above 25,200 or a breakdown below 24,500 to determine the direction of the market.
“We are expecting volatility on expiry day, and investors should watch for a breakout above 25,200 or a breakdown below 24,500 to determine the direction of the market,” said an analyst at a leading brokerage firm.
In addition to the Nifty 50 index, other stock market indices are also trading within a tight range. The Sensex, which is another widely followed benchmark of the Indian stock market, has also been trading within a tight range. The Sensex has been stuck between 32,000 and 33,000, with limited upside and downside movements.
The range-bound behavior of the Nifty 50 index and other stock market indices has led to increased volatility in the market. This volatility has been driven by several factors, including the lack of clear direction from global markets and the lack of clear guidance from the RBI.
Despite the volatility, analysts are advising investors to maintain their long-term perspective. The Indian economy is expected to grow at a moderate pace in the coming years, and this should lead to increased demand for stocks. Additionally, the RBI’s decision to keep interest rates unchanged has also led to increased demand for stocks.
“Investors should maintain their long-term perspective and look beyond the short-term volatility,” said an analyst at a leading investment firm.
In conclusion, the Nifty 50 index is expected to remain rangebound in the coming days, with analysts advising investors to watch for a breakout above 25,200 or a breakdown below 24,500 to determine the direction of the market. The range-bound behavior of the Nifty 50 index and other stock market indices has led to increased volatility, but analysts are advising investors to maintain their long-term perspective.
Source:
