Volatility and Profit booking strips Sensex and Nifty

Source : Sify
Author : Finance Desk
Last Updated: Tue, Mar 17th, 2020, 17:37:55hrs
Volatility and Profit booking strips Sensex and Nifty

Mumbai: Domestic equity indices were poised to stay afloat and post a greener number, but profit-booking by the end of the trading session on Tuesday ate all the day's margins. The thirty scrip sensitive Sensex skittled down by 810.98 points or 2.58% to close at 30,579.09 while the fifty scrip Nifty50 settled at 8,967.05, down by 230.35 points or 2.50%.  

Volatility in equity markets recorded by NiftyVix soared to 6.81% up at 62.8550.

The Sensex opened at 31,611.57 and touched an intra-day high of 32,047.98 before slumping by 900 points. Top gainers on Sensex were Hindustan Unilever, Hero MotoCorp, AsianPaints, PowerGrid Corporation, and Maruti. Losers included major banking stocks such as ICICI Bank, IndusInd Bank, HDFC, and others such as Infosys and Bajaj Auto.  

Most indices on the BSE remained in a bearish trend with most small cap, large cap and midcap indices recording a loss in range of 0.9-2% in the intra-day session. Banking and Financial stocks were hit the most in trade.  

On the Nifty Bank, Yes Bank and Bank of Baroda recorded gains, while IndusIndBank, ICICI bank, Federal Bank and IDFC First recorded massive loses.


A chart of Nifty Bank Index

Shrikant Chouhan of Kotak Securities in a note said, "US markets are falling on a daily basis and now have lost more than $16 trillion since the late February peak. The CBOE’s VIX volatility index holds near record highs at 80 and it was at 89.53 when the market fell in 2008. It’s a global phenomenon and our markets are also following the trend. Nifty fell to 8900 levels with a substantial jump in volatility index which closed at 63.29. Today, again large-cap stocks came under selling pressure and closed nearly 8-9% lower.  However, purely on the basis of technical analysis, we feel the level of 8850 should act as a major support for the market and in case Nifty closes below the same then it would result in further decline towards 8550 levels. Any rebound from 8850 levels would be positive for the market. In fact, US markets closed at crucial support levels on Monday. If US markets survives above the recent lows then it would result in a strong bounce back in the near term."

The market capitalisation of BSE listed companies has come down to Rs 119.52 lakh crores post the session on Tuesday. The highest mcap in 2020 of BSE listed companies was reported on Jan 17 at Rs 160.57 lakh crores. This implies that in 42 trading sessions the BSE mcap is down by Rs 41.05 lakh crores.

Also Read: The main reason why Yes Bank soared on Tuesday

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