Mid-day Mood | Sensex, Nifty extend losses amid broad-based selling

Indices fall amid broad based selling

Sensex and Nifty 50 extended losses on May 7 amid selling pressure across sectoral indices and in the broader market.

Barring Nifty FMCG, all major sectoral indices were in the red with Nifty Metal index falling 2.7 percent, dragged down by Tata Steel and Hindalco.

In the broader market, BSE Midcap was down 1.8 percent and BSE Smallcap was down 1.6 percent.

India VIX rose 4 percent to 17. The volatility gauge or the fear index, has surged over 70 percent since its April 23rd low of 10, said Santosh Meena, Head of Research, Swastika Investmart.

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According to Meena two key factors are driving the VIX's rise. "First, portfolio investors are buying protective put options to hedge their holdings. Second, traders are speculating on significant price movements post-election by purchasing both calls and put options."

At noon, the Sensex was down 528.15 points or 0.7 percent at 73,367.39, and the Nifty 50 was down 178.20 points or 0.8 percent at 22,264.50. About 821 shares advanced, 2,333 shares declined, and 88 shares remained unchanged.

Sectoral Trend

12 out of the 13 major sectoral indices were down on May 7. Nifty FMCG was the only sectoral index which stayed in the green, FMCG giants Hindustan Unilever, Britannia Industries, Nestle India, ITC, and Tata Consumer saw impressive gains of up to 5 percent. The commentary surrounding the FMCG sector has mostly been positive with volumes having seen a minor uptick and a rural recovery on the horizon.

Also Read | Nifty FMCG index defies market blues; HUL top gainer, zooms 5%

On the other hand, Nifty Metal and Nifty PSU Bank fell over 2 percent.

Technical View

Sameet Chavan, Head Research, Technical and Derivative - Angel One had identified 22300 - 22200 as the support zone for Nifty 50 in early trade and the index continues to be within that range. "Any breach below this level could exacerbate market weakness," Chavan said cautioning investors.

Conversely, Chavan sees 22600 - 22800 levels as a resistance zone for Nifty 50.

Key Nifty gainers

HUL, Britannia, Nestle, ITC

Key Nifty losers

Bajaj Auto, Hindalco, Power Grid JSW Steel

Key Sensex gainers

HUL, Nestle, ITC, L&T

Key Sensex losers

Power Grid, JSW Steel, IndusInd Bank, M&M

Stock moves

Mahindra and Mahindra Financial Services: Shares tumbled over 3 percent after the non-bank lender disappointed Street with its weak Q4FY24 performance, prompting brokerages to trim guidance for FY25 and reduce target prices on the counter.

Lupin: Shares slumped around 5 percent after the company reported lower-than-expected rise in its Q4 FY24 net profit, dragged by a spike in raw material costs.

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