Volatility spiked with the 4th phase of Lok Sabha elections today.India VIX shot up 14%.The BSE Sensex was trading over 750 points lower at 71,900 level while Nifty50 dipped below 21,850, down 210 points.
Nifty PSU Bank also plunged by 2.1% Bank of India, Union Bank of India, and PSB.
"There is confusion regarding the reasons for the aggressive FPI selling in May.
There are media reports attributing the FPI selling to possible setbacks to the NDA/BJP in the elections.
"This change in stance has been caused by the recent outperformance of China (Shanghai Composite up by 3.96% and Hang Seng up by 10.93% last one month) and underperformance of India ( Nifty down by 2.06% last one month).
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Ahead of domestic inflation data due later in the day, Indian benchmark equity indices traded with deep cuts on Monday, dragged by auto and IT stocks. Volatility spiked with the 4th phase of Lok Sabha elections today.India VIX shot up 14%.The BSE Sensex was trading over 750 points lower at 71,900 level while Nifty50 dipped below 21,850, down 210 points. NTPC , Reliance Industries, and Power Grid were the top Sensex laggards in early trading. Conversely, Sun Pharma, HUL, and Kotak Bank were the sole gainers at the opening bell.Tata Motors shares fell over 6% as the company expects local demand for passenger vehicles to weaken in the first half of fiscal year 2025, dampened by ongoing national elections.JK Cement opened 6% higher after the company posted a 101% YoY increase in its consolidated net profit to Rs 219.75 crore in Q4 of FY24.On the sectoral front, Nifty Auto declined 2.5%, dragged by Tata Motors, TVS Motor, and Samvardhana Motherson. Nifty PSU Bank also plunged by 2.1% Bank of India, Union Bank of India, and PSB."There is confusion regarding the reasons for the aggressive FPI selling in May. There are media reports attributing the FPI selling to possible setbacks to the NDA/BJP in the elections. It is important to understand that the FPI selling is due to a change in FPI stance from ‘sell China , buy India’ earlier to ‘sell India, buy China’ now," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services."This change in stance has been caused by the recent outperformance of China (Shanghai Composite up by 3.96% and Hang Seng up by 10.93% last one month) and underperformance of India ( Nifty down by 2.06% last one month). This is likely to be a near-term trend triggered by the cheap valuations of Chinese stocks and the relative high valuations of India," Vijayakumar added.Deepak Jasani, Head of Retail Research at HDFC Securities, said, "The Nifty could stay in the 21777-22232 band for the near term."The improved sentiment has helped lift Chinese blue chips to a seven-month high. MSCI's broadest index of Asia-Pacific shares outside Japan was flat, having hit its highest in more than 15 months last week. Japan's Nikkei eased 0.2%.S&P 500 futures and Nasdaq futures were both little changed early on Monday, after rallying last week as company earnings came in strong.Foreign investors net sold Indian shares worth Rs 2,118 crore on Friday, while domestic institutional investors net bought Rs 2,710 crore in stocks. FPIs have been sellers in 23 of the last 28 sessions.Oil prices extended declines on Monday amid signs of weak fuel demand and as comments from U.S. Federal Reserve officials dampened hopes of interest rate cuts, which could slow growth and crimp fuel demand in the world's biggest economy.Brent crude futures slid 26 cents, or 0.3%, to $82.53 a barrel, while U.S. West Texas Intermediate crude futures was at $78.03 a barrel, down 23 cents, or 0.3%.The Indian rupee opened flat at 83.51 against the US dollar on Monday. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rose 0.02% to 105.31 level.(With inputs from agencies)
