D-Street Week Ahead: F&O expiry, FII flow, Omicron likely to be in focus

Volatility may be expected in the last week of the calendar year, with the expiry of monthly futures & options contracts due on December 30. Newsflow related to COVID cases and restrictions to curb the spread of the pandemic will be tracked closely.

"The recent volatility indicates caution that the new COVID variant might result in restriction of economic activities as its transmission rate is high despite being less severe... After the initial choppiness, global markets, the US, are settling now however it’s not the case in our markets yet," said Ajit Mishra, VP Research at Religare Broking.

He believes a decisive close above 17,150 would lead to further gains for the Nifty50, otherwise profit taking would resume.  "Traders should keep a close eye on the banking index for cues," he said.

"Nifty is trading within a downward sloping channel and continues to remain choppy. The Bank Nifty, which was already reflecting weakness, has broken the crucial support level and may retest the 34,000 level," she said.

Monthly data on infrastructure output is due on Friday. Quarterly current account numbers are due on the same day.

Futures and options (F&O) contracts for the month of December are due to expire on December 30.

Three shares will hit the secondary market this week.

Fund flow will be tracked closely. Foreign institutional investors net sold Indian equities worth Rs 4,355.3 crore ($573.1 million) last week, according to provisional exchange data.