Analysts: Volatile Markets on F&O Expiry and Trump Tariff

The upcoming week is expected to be filled with volatility in the equity markets due to a mix of factors including domestic macroeconomic data, monthly F&O expiry, and global developments following US President Donald Trump’s tariff hike post the Supreme Court verdict, analysts predicted.

Foreign investors’ trading activity, movements in crude oil prices, global monetary signals, and developments between the US and Iran will also play a pivotal role in guiding market movement during the week, analysts added.

“Expect the markets to be on edge next week, especially with the monthly F&O expiry on February 24. Key data releases to watch out for domestically include GDP figures, government budget value, foreign exchange reserves, and infrastructure output (YoY),” shared Ajit Mishra, SVP, Research, Religare Broking Ltd.

He also highlighted that investors will be closely analyzing the potential impact of a new executive order by Trump on trade dynamics, tariff structures, and global risk sentiment post the US Supreme Court ruling on tariffs.

Following the court ruling, Trump imposed a 10% tariff on various countries, including India, for 150 days, but later increased it to 15%, prompting concerns about renewed trade tensions and potential global ramifications, analysts noted.

In a blow to Trump’s key economic agenda, the US Supreme Court deemed the tariffs imposed by the president on nations worldwide as illegal, stating that he had overstepped his authority by enforcing sweeping levies using the International Emergency Economic Powers Act (IEEPA) of 1977.

Vinod Nair, Head of Research, Geojit Investments, highlighted that investors will keep a close eye on developments between the US and Iran, movements in crude oil prices, and global monetary signals. Moreover, the release of India’s GDP data next week will be closely monitored for its impact on earnings momentum and broader market positioning.

In the past week, the BSE Sensex rose by 187.95 points, or 0.22%, while the Nifty saw an increase of 100.15 points, or 0.39%.

Market sentiment fluctuated between caution and optimism during the week, with strong buying in banking, financials, power, and select FMCG sectors offsetting the impact of global uncertainties, Nair observed. He noted that IT stocks faced challenges due to concerns surrounding AI-led disruption and margin pressures.

Despite these obstacles, the market demonstrated resilience in large caps, selective sectoral flows, and optimism surrounding India’s participation in Pax Silica, resulting in a positive bias at the week’s end, he highlighted.

Analysts believe that the domestic market will likely continue its range-bound movement in the near term, with liquidity flows and global risk sentiment serving as crucial triggers for market direction.