Derivatives expiry may keep market volatile

The market will enter a highly volatile week on account of expiry of the March 2007 derivative contracts. Rollover from the March 2007 contracts to the April 2007 contracts has already started. With the market scheduled to remain closed next Tuesday (27 March) for a public holiday, only three trading sessions are left before the expiry of the March 2007 contracts.

Technical analysts feel the support for the Sensex exists at 13,145 levels and the resistance at 13,520. For the S&P CNX Nifty, the support exists at 3,800 and resistance at 3,915.

Inflation has been a cause of concern in the past few months. Inspite of taking several measures to curb it, so far the government has not been able to bring it down. India's wholesale price index rose 6.46% in the 12 months to 10 March 2007, matching the previous week's annual increase, latest data showed on Friday (23 March).

A lot will depend on how the global markets pan out. Over a past few months, local bourses have been tracking global cues in the similar direction. Any sharp correction will lead to a fall here as well.

Crude oil rose to a near two-week high in New York on speculation that stronger demand may push US gasoline consumption to a record this summer. Prices rose as high as $ 61.99 a barrel on Friday (23 March). Any sharp surge on this side may dampen the sentiment further.

The next major trigger for the domestic bourses is Q4 March 2007 earnings, reports of which by corporates will start next month. Analysts expect Q4 results to be strong. Market men will closely watch what company managements have to say about the outlook for FY 2008.