Investors are likely to opt for wait and watch mode in the upcoming week due to the holiday truncated sessions.
In fact, the stock market enters a three-day week that is the lull before earnings season. The focus will primarily be on the headlines on developments around the spread of the coronavirus that may result in the most volatility.
Investors appear more focused on how the virus is progressing, what medical developments might help, and how long it could take to end the shutdown announced by most countries.
Oil could be another factor in the week ahead as OPEC and Russia hold an emergency meeting Monday to discuss production cuts. Oil rallied 12% in the past week with West Texas Intermediate futures at $28.34 per barrel, its best week ever.
US President Donald Trump sparked the rally when he said he spoke to Saudi Arabia and Russia and they wanted a deal to cut production.
In the past week, stocks were lower for the third week in four, as the market absorbed the latest shocking reports of layoffs, and investors worried about the duration of the virus related shutdowns.
India’s key benchmark indices, Sensex and Nifty took further cut as sell-offs continued amid the surge in covid-19 cases. However, the pace of single-day fall has declined significantly. On Friday, BSE Sensex ended at 27,590.95, down 674.36 points or 2.39%, while the 50-share Nifty fell 170 points or 2.06% to 8,083.80.
Last week, the India volatility index, or VIX, has fallen 21.43%, indicating that fear is ebbing. It fell by 7.91% to 55.3 on Friday. VIX had touched levels of 83 towards the end of March, but has since been declining to below 60.
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