Volatility ahead of derivatives expiry likely

The maker continued to be in a correction mode with the Sensex ending 80 points lower at 38564, while Nifty closed 18.50 points at 11576 on Tuesday.

It was a volatile trading session, after opening on a positive note led by stable global cues, selling emerged in the last hour of trade. The broader markets performed largely in-line with the benchmark with the Mid-Cap and Small-Cap both ending on a flat note.

About 1132 shares advanced, 1380 shares declined, and 147 shares were unchanged.

Maruti Suzuki, Yes Bank, Tata Steel, IndusInd Bank and Hero Motocorp were top losers on the Nifty, while ONGC, Zee Entertain-ment, Sun Pharma, Bajaj Finance and Reliance Industries were the major gainers.

According to analysts, crude oil is creating havoc among the markets. Brent prices crossed levels of $74 per barrel on Monday, the highest since November last year, due to the tightening supply as US demanded an end to the Iranian oil waivers by May 1. However, as the sudden spike in oil is mainly led due to fear of limited inventory, this speculation will be short-lived and will not have a long-term impact on stocks until oil levels touch extremes of $100/barrel. Oil marketing companies, paints and aviation are some sectors which will face the heat due to the volatility in oil prices.

Analysts are expecting volatility in couple of days ahead of the April series expiry.

Technical Vew
"At this juncture, traders are advised to see how Index behaves around 11549 and a violation of the same on a sustainable basis could trigger further correction towards 11475 - 11400 or may even get worsen. On the flipside, 11653 followed by 11705 remain to be immediate hurdles," said Sameet Chavan Chief Analyst-Technical and Derivatives, Angel Broking.

Nifity is on a correction mode for a short term period as the rise in crude oil prices, fallen of Rupee and surge of India VIX is putting pressure on benchmark indices.

"We expect the current corrective decline to mature in the coming one or two sessions. Going forward we expect 11550 is the crucial support level. However, the Index needs to forming Higher High and Higher lows on the daily chart to remain intact in up-trend," says Manish Yadav, Head of Research, CapitalAim.

Technically, with the Nifty correcting, traders will need to watch if the Index can now hold above the crucial immediate support of 11550; else a further correction is likely, analysts said.

Market View
"We expect the markets to continue to remain volatile in the near term given the earnings outcome and central election progress. On the global front, crude oil is trading at 2019 highs ... India is one of the key importers of Iranian oil and hence the developments on the sanction waiver would be closely monitored along with currency movement. We believe that any correction in quality large / mid-cap companies with strong growth prospects should be considered as a good buying opportunity," Jayant Manglik, President - Retail Distri-bution, Religare Broking.