Brace Yourself for Volatile F&O Expiry Week: US Tariffs and Global Cues to Shake Up Markets!

It’s shaping up to be an eventful week for Indian stock markets, and investors should be prepared for some twists and turns. Several factors—including the F&O expiry, ongoing global trade tensions, foreign investor activity, and economic cues from around the world—will play a big role in shaping market movements. If you’re watching the markets closely, here’s what to keep on your radar this week.

F&O Expiry: A Recipe for Volatility

One of the biggest events of the week is the expiry of Futures and Options (F&O) contracts on Thursday, March 28. If you’ve been tracking the markets, you already know that expiry weeks tend to bring heightened volatility. Traders rush to adjust their positions, close contracts, or roll them over to the next month, which often leads to sharp price swings.

This time, the F&O expiry comes at a time when global uncertainty is already high, making things even more unpredictable. Large-cap stocks and index futures are likely to see sudden moves as institutional investors and hedge funds react to broader economic developments. If you’re an investor, expect some choppiness and be prepared for the possibility of knee-jerk reactions in the markets.

US Tariffs: A Global Domino Effect?

Trade tensions have been a constant source of worry for global markets, and this week is no different. The US has been considering changes to its tariff policies, particularly when it comes to China. While this may seem like a distant issue, the reality is that such moves could have ripple effects worldwide—including in India.

Import prices might rise and global supply chains could be disrupted if the US increases taxes on Chinese goods. Indian companies that rely on Chinese raw materials or components may be immediately impacted by this. Certain industries, such as manufacturing, automobiles, and technology, may suffer from stricter trade restrictions.

In addition, the United States could enact new trade laws that directly affect India. Over the years, India has been subject to steel and aluminum tariffs, and any future changes in US policy might have an effect on companies operating in those sectors. Investors should keep an eye on Washington’s statements since they might impact the market as a whole.

FII Activity: Will Foreign Investors Stay or Exit?

Foreign Institutional Investors (FIIs) play a crucial role in the Indian stock market. When FIIs invest heavily, the markets tend to perform well. When they pull money out, markets can experience sharp corrections.

Lately, FIIs have been somewhat cautious. Rising global inflation, uncertainty around interest rates, and geopolitical concerns have made foreign investors think twice before putting big money into emerging markets like India. If FIIs continue to pull funds out this week, it could create additional selling pressure. On the other hand, if they see India as a strong investment opportunity despite global uncertainty, it could provide much-needed stability to the market.

Global Cues: Will the Markets Follow Wall Street’s Lead?

Markets are not isolated from one another. The way that investors respond in India is frequently influenced by events in the US and other global economies. The US Federal Reserve’s inflation and interest rate announcements, in particular, will be crucial worldwide indicators this week.

The Fed’s potential to hint at more interest rate rises will be eagerly watched by investors. When US interest rates rise, international investors tend to shift their funds from developing nations like India to safer assets like US bonds. The Fed may exert pressure on Indian stocks if it continues to take a hawkish posture.

Beyond the US, other global factors like oil prices, geopolitical developments, and economic data from Europe and China will also influence market movements. Any major surprise from these regions could add another layer of uncertainty.

What to Watch This Week

As we head into the last week of March, here are some key things to keep an eye on:

• F&O Expiry on Thursday: Expect increased market volatility as traders close or roll over contracts.

• US Tariffs & Trade Policies: Any developments from Washington could impact global sentiment.

• Foreign Investor (FII) Activity: Will FIIs stay invested in India or pull out money?

• Global Economic Data: US Federal Reserve announcements, European inflation data, and China’s trade numbers could influence market direction.

• Crude Oil Prices: Rising oil prices could put pressure on inflation and impact key sectors.

Final Thoughts: A Rollercoaster Week Ahead

With so many factors in play, this week is likely to be anything but dull. The F&O expiry will add a layer of volatility, while global cues—especially US trade policies and FII trends—will keep investors on edge. Markets could swing in either direction depending on how these events unfold, so staying informed and keeping a close watch on developments will be key.

If you’re an investor, this might not be the week to make impulsive decisions. Instead, staying patient and focusing on long-term trends could be a smarter approach in the face of uncertainty.