The week is expected to be highly volatile for the market weighed by global

RELATED ARTICLES Sensex snaps two-day rally, down 82 pts on poor IIP nos Sensex snaps two-day rally, down 82 pts on poor IIP nos Sensex snaps two-day rally, down 82 pts on poor IIP nos RBI issues guidelines on accepting foreign contribution India sees business opportunity in Iran after US, EU sanctions

and domestic triggers. In the US, the Federal Reserve’s decision regarding the lending rates and here in India as well, the Reserve Bank of India’s decision on the key ratios and rates are likely to influence the market.

The expiry of near-month futures and options contracts may spur choppiness.

“The market is likely to remain volatile this week ahead of the expiry of the near month futures and options contracts. Domestic cues including the Reserve Bank of India’s money policy meeting and remaining third quarter results will keep bourses choppy while the US Federal Reserve’s decision regarding lending rates is expected to be keenly watched. We advise investors to stay away from the market and take any call after the main events passes away,” said Gajendra

Nagpal, founder and CEO of Unicon Financial Intermediaries.

The expert does not expect any major short coverings ahead of January expiry.

“Short coverings occur when investors don't get time to square up their positions. As we can see our markets were much volatile in the past few trading sessions, investors may had got enough time to cover their positions than to wait for the last week of expiry.”

The rate of inflation has shot up drastically and experts have a mixed opinion on whether the apex bank will use money measures to tame rising inflation in its upcoming meet.

“We don't expect the RBI to announce any changes in its upcoming meet. All the key rates including repo and reverse repo rates may remain unchanged,” said Saugata Bhattacharaya, vice-president for business and economic research at Axis bank.

On the other hand brokerage house Ambit Capital believes there will be some action by the apex bank in the upcoming policy meet.

“We continue to believe that RBI will use the cash reserve ratio and the policy rates to achieve its twin objective of price stability while simultaneously sustaining the growth trajectory. In the extreme short-term, we expect to witness a 25-50 basis points hike in the cash reserve ratio, which could result in absorbing liquidity to the tune of $2-4 billion,” said the brokerage in its inflation monitor.

The BSE Sensex plunged 694.62 points, or 3.96 per cent, last week to close at 16,859.68. The Nifty index on NSE dropped 216.20 points, or 4.12 per cent, last week to end up at 5,036.

The foreign institutional investors (FIIs) remained the net seller on Friday, pulling out equities worth Rs 569.60 crore from the markets, according to the figures available at the market regulator Sebi website.

The put-call ratios Financial Tech, Beml, Federal Bank and ACC in terms of open interest for the near-month expiry stood at 127.50, 26, 13.67 and 2.89, respectively, reflecting bearish sentiments on these counters.