Winter session, euro zone meet to set market tone

Tags: Stock Market
Market is likely to stay volatile this week ahead of expiry of near-month futures and options (F&O) contracts.

winter session of the Parliament and GDP data, which is scheduled towards the close of the week, will play an important role in influencing sentiments. Global cues, including discussions on Greece bailout package, could also fuel sentiments during the truncated week.

Market will remain shut on Wednesday on account of Gurunanak Jayanti.

“FDI in multi-brand retail has dominated the proceedings initially, but many policy actions would require legislative sanctions. The winter session would be a crucial test for the government to not just resolve issues, but also to prove its political acumen. Also, watch out for India’s GDP figure. Technically, markets turned resilient despite slide in rupee and managed to post recovery to close above 5,600 levels. The 500-DMA has been acting as major resistance around 5,640 levels and till then the bias remains negative,” said Amar Ambani, head of research at IIFL.

According to a median estimate of 20 economists on Bloomberg, the GDP growth may arrive at 5.3 per cent for the September quarter, compared with 5.5 per cent in the June quarter. Euro zone cues would also be noteworthy to look at as Greece may finally get next tranche of bailout.

“The European leaders could not arrive at a consensus over giving the next tranche of aid to Greece, but expectations are that the same will be provided next week. With the results season behind us, focus over the next three to four weeks will shift to the reforms and also the fiscal cliff issue in the US. If some of the proposed bills are taken up and passed, we can see the sentiment turn bullish and markets trending higher over the next few weeks.” Dipen Shah, head of PCG research at Kotak Securities.

There are fresh reports that the euro zone finance ministers are considering a possible ‘haircut’ for Greece in 2015. A meeting of euro zone ministers thus is scheduled for Monday for their third effort to agree on unlocking a $40 billion.

Meanwhile, experts see Nifty to expire around 5,600-5,700.

“The current option open interest suggests that November month should expire in the range of 5,700 and 5,600.The Implied Volatility (IV) is also indicating a sideways trend,” said SMC Global Securities in a note.

Post expiry all eyes would be on the month of December, which is said to be positive for markets.

“December is the best month for the markets with the highest risk-adjusted returns, shows our analysis of last 33 years data. Interestingly, the performance is not driven by flows with both, FIIs and DMFs, taking it easy in December. A weak rupee, however, remains the biggest overhang against history repeating itself this year,” said Tirthankar Patnaik of Religare Institutional Research.


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