The markets remained choppy despite the trend reversal as India VIX (volatility index) soared to 83.61% on Tuesday to hit its highest level since November 17, 2008.
Markets took a breather on Tuesday to end the day in the green. Sentiment in the market was buoyed by the likely announcement of a stimulus package by the government and the positive signals coming from global markets. The 30-share index Sensex gained as much as 1,481.6 points intraday but was unable to hold on to its gains and ended the day at 26,674.03, up by 692.79 points, or 2.67%. The broader Nifty50 was up by 2.51%, or 190.8 points, to close at 7,801.05. The markets remained choppy despite the trend reversal as India VIX (volatility index) soared to 83.61% on Tuesday to hit its highest level since November 17, 2008. Indian markets have corrected by nearly 40% and have been trading in the red so far because of the relentless selling by foreign portfolio investors (FPIs) who have taken out $7 billion from the Indian equity markets till March 23. FPIs have sold Indian shares worth $8.5 billion between February 24 and March 20.
According to Vinay Pandit, head of institutional equities at IndiaNivesh Shares & Securities, between 6,800 and 7,500 points, Nifty could see a bottom. “Today’s rally could be interpreted as a small dead cat bounce and a small part of it could be buying in the anticipation of a fiscal package. Market participants will look forward to solid cash based buying by institutional investors to catch the first signals of value-based buying,” he said.
Globally, South Korea’s Kospi was up by 8.6%. On the other hand, bourses in Shanghai, Hong Kong and Taiwan were up between 2.36% and 4.46%. European markets were also trading higher. Market experts suggested that the up move in markets globally was because of the fiscal stimulus package announced by the US Federal Reserve.
Brent crude surged 4.3% on Tuesday, and was hovering at $28.18 per barrel. Additionally, the rupee gained 23 paise against the US dollar after hitting a record low of 76.29 in the previous session. Vinod Nair, head of research, Geojit Financial Services, said that the market movement was in tandem with global markets. “The market came off its highs after no significant announcements by the FM and the fact that the economic package was still in development. The European and US manufacturing activity data due later, which may indicate the impact of Covid-19 on economies, could influence markets on Wednesday,” he said. Finance minister Nirmala Sitharaman announced easing of some compliances and also said that the government was very close towards announcing a fiscal package.
The biggest gainers on Nifty were Infosys, Adani Ports & SEZ, Britannia, Bajaj Finance and Maruti. Shares of Infosys rose by 13.97% to close at Rs 600 a piece. The shares made their single-biggest one day gain in seven years after the US Securities and Exchange Commission (SEC) gave it clearance on the whistleblower complaint.
Shares of Adani Ports, Britannia, Bajaj Finance and Maruti Suzuki India were up by 13.81%, 11.79%, 10.80% and 7.69%, respectively. On the other hand, biggest losers on the Nifty were Mahindra & Mahindra, Grasim, IndusInd Bank, Powergrid Corp and Bharti Infratel. Shares of Mahindra & Mahindra were down by 7.98% and Grasim’s were down by 7.67%. IndusInd Bank shares were down by 6.79%. Powergrid and Bharti Infratel were down by 2.75% and 2.37%, respectively.
The Nifty Midcap index was up by 1.09% and Nifty Smallcap was down by 0.98%, respectively. The frontline indices made gains between 1% and 3% during the trading session. Among the overall sectoral indices, only Nifty Realty was down 0.98%. Nifty IT, Nifty FMCG and Nifty Pharma were the biggest gainers in the market on Tuesday. The Bank Nifty gained 1.1% to end the day at 17,107.30.