Stock market today: BSE Sensex tanks over 400 points; Nifty50 below 22,350
Stock market today: BSE Sensex tanks over 400 points; Nifty50 below 22,350
Domestic benchmark indices, BSE Sensex and Nifty50, showed weakness despite positive signals from global markets. Globally, markets continue to display buoyancy due to expectations of central bank rate cuts later this year. While BSE Sensex dipped over 400 points, Nifty50 fell below 22,350. At 10:50 AM, BSE Sensex was trading at 73,469.83, down 426 points or 0.58%. Nifty50 was at 22,318.65, down 124 points or 0.55%.
The Indian market has been underperforming recently, despite positive global cues. While the Dow has been on an upward trend for four consecutive trading sessions, the Nifty has become highly volatile and apprehensive. According to V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, there could be several reasons behind this phenomenon.
One potential factor is the selling by FIIs, which amounted to Rs 5525 crores in the first three trading sessions of May. However, this is not unusual, as FIIs tend to sell when US bond yields are attractive.
Another significant factor that might be contributing to the market’s apprehension is the unexpectedly low turnout in the elections so far. Some believe that the definite and smooth victory of the ruling dispensation is now somewhat uncertain, V K Vijayakumar was quoted as saying by ET. The market, which had already discounted a BJP/NDA victory, is now a bit unsure, he said. This uncertainty could be the reason behind the apprehension in the market and the bulls shedding their aggressive stance, he added.
Over the last month, the VIX has spiked by 46% and is currently hovering around 16.6, indicating that volatility and uncertainty are likely to persist for some time.
The Indian equity markets experienced a gradual decline on Monday, despite opening higher, amidst heightened volatility. Analysts attributed the increasing nervousness among investors to ongoing global uncertainties and the upcoming Lok Sabha election results.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal, said, “Hence, markets are likely to remain in a broader range with stock-specific action in the near term.”
Technical analysis by Tejas Shah, Technical Research, JM Financial & BlinkX, indicates that the Nifty is expected to remain volatile within the range of 22,200–22,800 in the near term, with a negative bias. The immediate resistance zone for Nifty is at 22,600-625 levels, with the next resistance at the 22,800 mark.
US stock indexes closed higher on Monday, marking their third consecutive session of advances, as investors grew more optimistic about the possibility of the US Federal Reserve cutting interest rates this year.
Asian stocks followed suit, rising in early trading, while oil prices ticked up slightly following Israel’s strike on Rafah in Gaza. The Japanese yen continued to weaken against the US dollar due to significant interest rate differentials.
Foreign portfolio investors were net sellers on Monday, offloading shares worth Rs 2,168 crore, while domestic institutional investors bought shares worth Rs 781 crore. The Indian rupee settled 7 paise lower at 83.52 against the US dollar, weighed down by elevated crude oil prices. The net short position of FIIs reduced from Rs 46,719 crore on Friday to Rs 35,038 crore on Monday.
Several companies, including PB Fintech and Dr Reddy’s, are set to announce their fourth-quarter earnings on Tuesday. Investors will be closely monitoring these results for insights into the performance of these companies and their respective sectors.
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