Airtel, HDFC Bank, RIL drag Sensex, India VIX at 6-month low; check what kept investors on edge today

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August 13, 2020 4:30 PM

Sensex ended at 38,310, down 59 points or 0.15 per cent, while the broader Nifty 50 index settled at 11,300.

Stock marketThe India VIX fell 2.3% to 20.36, falling for straight eight days at the lowest level in six months

Indian share markets settled lower after gyrating between gains and losses throughout the session on Thursday amid sell-off in financial and pharma stocks. After much ups and downs, Sensex ended at 38,310, down 59 points or 0.15 per cent, while the broader Nifty 50 index settled at 11,300. Index heavyweights such as Bharti Airtel, ITC, HDFC Bank, Housing Development Finance Corporation, Reliance Industries (RIL) were among top stocks which contributed to the indices’ loss today. On the contrary, Larsen & Toubro was the top Sensex gainer, after the company secured orders worth Rs 1,000-2,500 crore. It was followed by Titan Company which gained 3.73 per cent to end at Rs 1,097.6 apiece. HCL Tech, UltraTech Cement, Tech Mahindra were among other gainers.

What’s keeping investors on edge?

Weekly expiry: Indian share market benchmark indices traded range-bound. “Considering the fact that it was a weekly expiry and the indices were range-bound, the fact remains that with the rise in COVID cases on one hand and hopes of vaccines and unlocking on the other, traders at large are waiting on sidelines before taking any bet,” Rajesh Agarwal, Head of Research, AUM Capital Market, told Financial Express Online. Agarwal added that the broader range for Nifty as of now is 10800-11500. “There is action outside the Nifty though and quality companies with strong fundamentals, where the numbers have been well followed by good management commentary are witnessing strong accumulation. Pharma, Steel and FMCG companies are witnessing trader interest,” Agarwal added.

Profit booking in IT, pharma stocks: Most of the large-cap and midcap stock have declared their quarterly results which resulted in reaction in stock prices. “In the last two weeks, we have seen sectorial rotation and stocks which have shown good runup in the month of July are showing some profit-taking at higher side. The sectors like IT and Pharma are on the back seat and shown some profit-taking while Metal, Automobile and Capital Goods have shown some buying action,” Rajesh Palviya, Head Technical & Derivatives, Axis Securities, told Financial Express Online. Looking at the current setup, Palviya expects range-bound moves for a few more trading sessions. Once Nifty manages to cross above 11400 level then it may scale up towards 11500-11550 while on the lower side 11200-11150 are likely to act as a good support level in any minor corrective action. “We advise to buy stocks if any dip comes in near-term,” Palviya added.

SC hearing on AGR tomorrow: Markets have been hovering in a narrow range for the last four sessions and indications are in the favour of further surge. “However, a lot would depend upon the outcome of the Supreme Court hearing on the AGR case on Friday. We thus advise continuing with hedged trades, with the bias on the positive side,” said Ajit Mishra, VP – Research, Religare Broking Ltd.

India VIX: India VIX, the volatility index, opened at 20.85 on Thursday and went down till 19.5 mark. However, the high of the volatility index was at 21.19 before closing at 20.36. “The India VIX fell 2.3% to 20.36, falling for straight eight days at the lowest level in six months,” said Deepak Jasani, Head Retail Research, HDFC Securities.

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