Anticipating Market Volatility in the Upcoming Week

New Delhi, March 10 (IANS) Volatility is expected to persist in markets in the upcoming week due to high valuations and forthcoming policy rate guidance releases, says Vinod Nair, Head of Research, Geojit Financial Services.

Vinod Nair stated, “The release of US payroll data and upcoming inflation data from the US, China, and India next week will provide investors with insights into the global macroeconomic outlook.” The ECB’s decision to keep the rate status quo adds to the uncertainty as they wait for further evidence confirming inflation control.

Despite mixed signals from the global market, the domestic market experienced a range-bound movement but concluded on a positive note. The expectation of a rate cut from the Fed and declining bond yields encouraged rational investors to shift towards equities, strengthening the market.

The improved macroeconomic narrative favored banking stocks while uncertainties in the global market led to weakness in the IT sector. The auto sector witnessed heavy buying due to the extension of the Fame II scheme and higher demand forecasts for passenger vehicles. Faster-than-expected economic growth for the current fiscal year boosted sentiments for metal and capital goods stocks, resulting in a rally in the respective sector indices.

However, small and mid-cap stocks faced corrections due to overvaluation, leading to profit booking and increased demand for large-cap stocks. Vinod Nair’s analysis suggests that rational investors should closely monitor upcoming policy rate guidance releases and economic data to navigate the expected market volatility in the coming week.