Domestic markets are expected to open flat on Monday amid mixed global cues. With global markets hitting new peaks with every passing day, analysts turned cautious on the valuation front. Individual stocks may face volatility due to the expiry of monthly derivatives contracts this Thursday, analysts said.

Gift Nifty is ruling at 22,220 against NIfty. The value of Feb futures is 22,228.85, and the value of March futures is 22,374.30.

Ajit Mishra, SVP - Technical Research, Religare Broking Ltd, said: “We expect volatility to remain high due to the scheduled expiry of February month derivatives contracts.”

Besides, he said that participants should keep a close watch on the performance of the global indices, especially the US, for cues.

Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy said: “Nifty has been in a consolidation zone for over one month, and we may soon see a breakout or breakdown with the former more likely. However, for any significant rally, the Nifty must give a decisive breakout above 22,250. The range of 22,100 - 22,130 is now the demand zone, and a slide below this range can push Nifty back towards 22,000 levels.

Santosh Meena, Head of Research, Swastika Investmart Ltd, said: “As we approach the February month Futures and Options (F&O) expiry alongside the MSCI rebalancing scheduled for Thursday, we anticipate heightened volatility. Several macroeconomic indicators from both domestic and global fronts will play crucial roles.”

GDP numbers and initial jobless claims will impact bond yields in the US. Moreover, our own Q3 GDP figures slated for release on February 29th and monthly auto sales data on March 1st will be closely watched.

Important factors

Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, said: Certain Tailwinds for the upcoming quarter are improved global trade and investments, sustained manufacturing profitability, underlying service resilience, surge in capex in the budget, and increased household demand.

He added that possible headwinds for corporate are challenges related to the availability of raw materials and escalating prices, soft demand, shortage of skilled labour, increased power costs, market volatility, and geopolitical risk.

According to VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, an interesting feature of the recent FPI trend is the decline in FPI equity outflows despite the rising bond yields in the US. “Normally, when the US 10-year yield rises above 4.15%, the FPIs sell heavily. But this is not happening now. Since the DIIs, HNIs, and retail investors are the dominant players now, and their sustained buying is pushing the market to newer records, FPIs have taken a backseat, he added.

From February through 23rd, FPIs had net sold equity only for ₹423 crore, sharply down from the January level.