F&O expiry, demonetisation may keep market volatile next week

After losing around 7 percent in last four consecutive weeks due to demonetisation move by the government, US elections and fears of likely Fed rate hike in December, the market is expected to be volatile next week.

Expiry of November futures & options contracts and rollover of positions to December month may cause volatility in the coming week. FIIs are likely to pull out more money from the emerging markets after Federal Reserve chair Janet Yellen on last Thursday hinted likely rate hike in December policy as she claimed that the US economy has been growing faster than before. FIIs so far net sold close to Rs 15,000 crore worth of equity shares since October.

Global investors maintained cautious stance and will closely watch for US policies that are likely to be announced by president-elect Donald Trump. Many investors expect huge spending by Trump that may boost inflation.

Back home, the winter session of Parliament, which started on November 16, was adjourned for all three days last week as opposition parties disrupted the proceedings due to demonetisation. That is likely to continue in the coming week also, which may dent the market sentiment further.

The winter session will be important for the government as it has lined up 19 legislative bills for discussion and passage. One of the important bills would be key legislation related to Goods & Services Tax (GST) Bill that will help the government to implement from its earlier deadline of April 1, 2017. Other bills include those on consumer protection, corruption and motor vehicles etc.

Key corporate earnings like L&T (November 22), Siemens, Bata, Nalco, Sobha, Aditya Birla Fashion etc will also be announced next week.

Traders will closely watch 8000 level on the Nifty. If it breaks that level then experts expect more selling pressure ahead.



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