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Rising bond yields, F&O expiry, GDP data to lend cues to market this week

MUMBAI: After a lacklustre week, market participants are gearing up for another week of likely correction as investors may continue booking profits in the wake of rising concerns over overheating in domestic and global stock markets.In the previous week, Nifty5 0 and Sensex ended with losses of over 1 per cent with banks producing the weakness in the market. Psychoanalysts are concerned that another day of loss on Monday could trigger a deeper correction in the market.That said, here are the major factors that can move the market: Keep an eye on government bondsThe multiple auction failure in the domestic bond market amid an ongoing tussle between attachment merchants and the Reserve Bank of India is making equity investors nervous too. Alliance merchants believe that 10 -year benchmark bond yields should be much higher than where it is, passed rising inflation concerns and growth expectancies, but the central bank seems adamant to pin harvests at 6 per cent. With the RBI set to conduct an operation switch in the next week, things are only going to get interesting from hereon.Global bond yields surgingRising global attachment yields and real interest rates in the US were seen as the reason for the tepid the actions of equities in the previous week. Valuations watchers will keep a hawk eye on the US 10 -year treasury yield, which is threatening to break higher amid inflation concerns. Rising US attachment yields are bad news for rising marketplaces as it stirs them less attractive for foreign investors.Fed Chief Powell’s Congress testimonyUS Federal Reserve Chief Jerome Powell’s testimony to Congress on Tuesday will be keenly watched by global investors. What Powell says about economic recovery and the Fed’s stance on policy amid surging US Treasury yields will provide cues on how the central bank is likely to behave in the coming months. If Powell does not view the rising bond harvests as worrisome, it could ease concerns that the Fed will be forced to normalise easy monetary policy a lot earlier than stated.F& O expiryThe expiry of the February derivatives serials on Thursday will be critical in shape traders’ beliefs for March as recent add-on of short positions in the February contract of Nifty5 0 have raised concerns of a likely deeper correction. Derivative psychoanalysts said that rollovers are likely to be on the long-side suggesting that any weakness could be limited.GDP data for the December quarterWhile the data released by the government for GDP on Friday will be dated given that cash advances estimates in respect of 2020 -2 1 were released after the Budget, nonetheless, investors will watch out for it to gauge if the economy returned to growth trajectory in the quarter as was widely accepted. Economists expect the year-on-year GDP growth to turn positive after contraction in the previous two quarters.RBI MPC minutesAmid the ongoing debate over bail harvests, the times of the central bank’s recent Monetary Policy Committee meeting has gained much important. While the MPC’s statement had said risk on inflation was largely balanced, it will be important to see how individual members opinion the inflation trajectory. The panel’s views on normalisation of plan posture on both interest rates and liquidity will also pique investors’ interest.Technical set-upAnalysts recommends that the read on the Nifty5 0 maps did not make for an optimistic see for this week. “The index has made a bearish engulfing candlestick structure which indicates rate abandonment at higher levels. The bulls are getting tired as the indicator is trading much higher than its mean grades, ” said Nirali Shah of SAMCO Securities.Shah believes that the market could see a brief corrective dip and said here today sustained losses below 15,050 on Nifty5 0 can trigger some more earning booking.

Read more: economictimes.indiatimes.com

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