New Delhi, Aug 23: The Indian equity market in the coming week will be largely driven by developments around COVID-19, August derivatives expiry and overall global economic sentiment, analysts said.
In the trading week ended August 21, benchmarks Sensex and Nifty advanced 557.38 points or 1.47 per cent and 193.20 points or 1.72 per cent, respectively. This was despite mounting coronavirus cases in the country, though positive global sentiment lent some support to the Indian market.
“Updates related to COVID-19 will be closely watched. Amid all, we expect volatility to remain high due to the scheduled F&O expiry of August month contracts,” said Ajit Mishra, VP-Research, Religare Broking Ltd.
Meanwhile, India’s COVID-19 tally zoomed past the 30-lakh mark, just 16 days after it crossed 20 lakh, while the death toll climbed to 56,706, official data showed.
Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services, said that besides coronavirus cases, investors going ahead would continue to track developments over the global economic recovery and the US-China tensions.
He further said that the market may continue its upward momentum in the near-term; however, it may witness intermittent profit-booking given lofty valuations.
Other factors like global crude oil movement, trend in rupee-dollar trade and foreign fund inflows will remain in focus.
Geojit Financial Services, Head of Research, Vinod Nair said that Indian markets are showing strong correlation with the global markets.
Markets globally are currently running on hope and liquidity, he said adding that expectation of economic activity picking up and earning normalising will have to translate into reality or at least show signs of it, for the markets to sustain the current momentum.
“From here on the pace of the improvement of economic indicators along with outcomes of a possible vaccine or cure for COVID-19 would determine the movement of the market,” Shibani Sircar Kurian, Executive Vice President, Fund Manager & Head-Equity Research, Kotak Mahindra Asset Management Company, said. (PTI)
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