Much like in the previous week, the market got off to a good start on Monday with the benchmark indices gaining more than 1% as the Budget session of Parliament began and it seemed that the government would be able to tackle the many challenges before it.
Stocks rallied as the ruling coalition agreed to the demand by the opposition parties’ for setting up a Joint Parliamentary Committee (JPC) to investigate the 2G scam. However, trading was marked by intense volatility as indices dipped into the red during the early part of the session only to surge at the fag-end as investors bought into some of the index stocks ahead of the F&O expiry later this week. Extending its biggest weekly rally since December, the BSE Sensex gained 226.79 points, or 1.25% to 18,438.31, meanwhile the broad-based Nifty added 59.65 points, or 1.09% to 5,518.6.
?Most of the negatives are priced in at current levels and the market is moving more on technicals,? said Piyush Garg, CIO, ICICI Securities. ?Going ahead market direction will be decided by the news flow.?
According to provisional figures by NSE, foreign institutional investors (FIIs) net sold stocks worth Rs 245 crore, while their domestic counterparts net sold worth Rs 28 crore. After investing a record $29 billion in 2010, FIIs have sold shares worth more than $1.7 billion in this calendar year. The sell-off by FIIs has pulled the benchmark indices down by over 10% since January.
?Market is not moving on institutional buying or selling as it is negligible,? said Garg.
All sectoral indices closed with gains except the Auto index, which declined 1.2%. BSE IT gained the most at 2.76%, followed by the oil & gas index, which added 1.8% Wipro, the third-largest IT firm, gained over 4% after three foreign brokerages upgraded their rating on the stock.. Reliance Industries gained over 2% on anticipation of the BP deal. The market breadth was mixed as gainers equaled losers on the BSE. Meanwhile, the BSE Smallcap and Midcap indices underperformed the benchmark indices with both closing marginally negative. Markets are expected to remain volatile in the run up to the Budget.
?The sharp turnaround in late trade shows the underlying volatility in the market. The F&O expiry coupled with weekend break before the Budget could add to the intra-day gyrations,? said Amar Ambani, head of research, IIFL.
The cash turnover on the NSE stood at Rs 10,834 crore while, below its six month average of about Rs 15,000 crore. Meanwhile, the turnover in the F&O segment was higher than the six-month average of Rs 1.3 lakh crore at Rs 1.64 lakh crore.