Sensex, Nifty end flat after falling for three sessions; broader markets resilient

Nervousness in the market drove India VIX higher for the tenth session

Benchmark indices BSE Sensex and NSE Nifty ended flat on May 8, as the Street grappled with uncertainty surrounding the general election results and subdued corporate earnings.

On the other hand, broader markets showed resilience after sharply falling the day before. While BSE Smallcap rose 0.5 percent, BSE Midcap edged up by 0.8 percent. Both the indices had fallen nearly 2 percent each in the previous session.

At close, the Sensex was down 45 points or 0.1 percent at 73,466.39, and the Nifty 50 was up 4.50 points at 22,307. About 1,946 shares advanced, 1,310 shares declined, and 106 shares remained unchanged.

Markets in consolidation amid elections, fail to hold near highs

“The market is trying to gauge the outcome of the election, which is creating some volatility in the market,” said Narendra Solanki, Head of Fundamental Research at Anand Rathi Share & Stock Brokers. “Additionally, profit booking at higher levels is keeping the indices from reaching new highs,” he added.

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Analysts view consolidation as the prevailing theme for the week. “Markets are likely to undergo a period of consolidation amid the election overhang and the lower voter turnout,” said Nirav Karkera, Head of Research at Fisdom.

Nervousness in the market drove India VIX higher for the tenth session. At close, India VIX was up 0.1 percent at 17. “India VIX may find stability in the range of 14-15,” said Solanki.

Pockets of opportunities in a muted market

Nonetheless, the market still offers opportunities for gains. “Despite challenges, factors such as a robust US economy, potential Federal Reserve rate cuts, and depressed WTI oil prices offer hope for market resilience,” said Prasanth Tapse, Senior VP of Research at Mehta Equities.

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Analysts are betting on FMCG and consumer durable stocks, anticipating a rural recovery driven by expectations of a robust monsoon season. Karkera expressed optimism for the metal and power stock as well. “We are expecting any pullbacks or dips in the segment, to witness a fresh round of buying,” he said.

Investors await the US initial jobless claims data due on May 8 which will help them determine the strength of the labour market.

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