Markets Brace for Volatility Amid Derivatives Expiry and Diwali

Equity markets face persistent volatility due to factors like FII selling, dismal Q2 earnings, and anticipation of the US presidential election. Special trading sessions are scheduled for Diwali, adding unique dynamics to the market. Investors remain cautious ahead of significant geopolitical and macroeconomic events.

In a holiday-shortened week, equity investors are closely watching foreign investor activity, global trends, and ongoing earnings reports for market cues. Analysts suggest benchmark indices may continue their consolidation amid monthly derivatives expiry.

Recent market performance indicates significant foreign capital outflows and disappointing Q2 earnings, leading to sharp declines. Experts predict continued market weakness due to cautious investor sentiment ahead of the forthcoming US presidential election.

While special 'Muhurat Trading' sessions on Diwali offer a unique trading window, analysts highlight that factors like FII flows, geopolitical developments, and pivotal macroeconomic data will heavily influence market direction.

(With inputs from agencies.)