Stock market today: Sensex, Nifty 50 end the week 2% lower; experts expect volatility to continue in near term

However, Friday’s gains in the market were insufficient to offset the losses incurred by the indices during the week. For the week ended May 10, the Sensex and the Nifty 50 ended about 2 per cent lower each, while the BSE Midcap and Smallcap indices fell 3 per cent and 4 per cent, respectively.

Investors lost nearly ₹10 lakh crore in a week as the overall market capitalisation of the firms listed on the BSE dropped to nearly ₹396.6 lakh crore on Friday, May 10, from nearly ₹406.2 lakh crore on Friday, May 3.

Lately, the Indian stock market has moved in contrast to its major global peers, with domestic factors outweighing global cues. The sharp selling by foreign portfolio investors (FPIs) ahead of the general election outcome has been the primary reason behind the domestic market’s decline. Additionally, the market has discounted several positives and lacks fresh triggers to sustain gains and move higher.

Also Read: 5 reasons why stock market is falling ahead of Lok Sabha election outcome

On Friday, Sensex snapped its three-day losing run to close 260 points, or 0.36 per cent, higher at 72,664.47, with shares of ITC, Reliance Industries and Bharti Airtel among the top contributors to the gain.

After five consecutive days in the red, the Nifty 50 ended 98 points, 0.44 per cent, higher at 22,055.20.

The BSE Midcap index rose 0.81 per cent while the Smallcap index increased by 0.80 per cent on Friday.

As many as 38 stocks ended higher in the Nifty 50 index, with BPCL (up 4.50 per cent), Power Grid (up 2.45 per cent) and NTPC (up 2.41 per cent) as the top gainers. On the flip side, shares of TCS (down 1.65 per cent), Cipla (down 1.38 per cent) and LTIMindtree (down 1.27 per cent) ended as the top losers in the Nifty index on Friday.

Also Read: Top Gainers and Losers today on 10 May, 2024: Bharat Petroleum Corporation, NTPC, Tata Consultancy Services, Cipla among most active stocks; Check full list here

Most sectoral indices ended higher on the NSE. Nifty Metal, FMCG, Oil & Gas, Consumer Durables and Healthcare indices rose by over a per cent each.

The Nifty Bank index fell 0.14 per cent, while the Nifty PSU Bank index declined 0.29 per cent. The Nifty Private Bank index rose 0.18 per cent.

Nifty IT (down 0.82 per cent) and Realty (down 0.44 per cent) also ended lower.

Volatility to continue in short term

Volatility gauge India VIX surged over 26 per cent this week, indicating growing uncertainty about the near-term movement of the market.

Also Read: Stock market today: Why is India VIX Index skyrocketing during Lok Sabha elections?

Experts expect volatility to continue in the market before the general election outcome on June 4.

Ajit Mishra, SVP- Research at Religare Broking advises not to place undue significance on a single day’s pause and to maintain a negative bias until the Nifty convincingly surpasses the 22,400 level. Mishra underscored there are indications of resilience in certain areas, allowing participants to explore buying opportunities selectively.

Also Read: Midcap stock Jupiter Wagons jumps to all-time high, quadruples money in 1 year. Time to sell?

“Looking ahead, the 21,800 level in Nifty is seen as critical, potentially influencing market direction,” he said.

Vinod Nair, the head of research at Geojit Financial Services said a trend of the sell-on rally is emerging given domestic premium valuation and election jitters creeping in the minds of investors given lower voter turnout.

Nair underscored that FIIs are selling Indian stocks given delays in rate cuts, concerns over inflation, moderate corporate earnings, and premium valuation.

“Apart from US consumer and inflation data, the possibility of US tariff actions on Chinese EV companies will attract market attention,” said Nair.

Amol Athawale, VP of Technical Research at Kotak Securities, said the short-term texture of the market is still weak. Still, the market could see one pullback rally from the current levels due to temporary oversold conditions.

“For traders now, 22,000/72,500 and 21,950/72,300 are important support levels. Above the same, the market could bounce back up to 22,200/73,000,” said Athawale.

“Further upside may also continue, which could lift the market to 50 days SMA or 22,300/73,300. On the flip side, fresh selling is possible only after the dismissal of 21,950/72,300, below which the market could correct to 21,800-21,700/71,800-71,500,” Athawale said.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.

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Published: 10 May 2024, 03:33 PM IST