BSE Sensex and NSE Nifty 50 gained on May 14, as investors seized the opportunity to buy stocks following the recent correction which made Indian equities attractive again.
At close, the Sensex was up 328 points or 0.5 percent at 73,104 and the Nifty 50 was up 118 points or 0.5 percent at 22,222. About 2,493 shares advanced, 891 shares declined, and 94 shares remained unchanged.
“Volatility had increased in anticipation of the general election results, and selling by FIIs was dragging down the indices. Additionally, high valuations had prompted some profit-taking. However, once Nifty 50 dipped below 22,000, buying activity resumed,” said Anita Gandhi, Whole Time Director at Arihant Capital Markets.
“Valuations are comfortable in large-cap stocks, prompting value buying,” stated Santosh Meena, Head of Research at Swastika Investmart. He credited the gains in benchmark indices to positive global cues and traders covering short positions.
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The broader markets outperformed the benchmarks with BSE Midcap rising over 1 percent and BSE Smallcap gaining 1.8 percent.
“In the midcap and smallcap sectors, valuations remain concerning, posing a risk of underperformance in certain segments,” Meena said. He recommended investors focus on large caps, as FIIs are expected to invest aggressively in the large-cap space after the general election results.
The India VIX, often referred to as the fear gauge, which had been on the rise for the past 13 sessions, saw a slight cooling off, dropping 0.7 percent to 20.5. Despite the relief seen, volatility is anticipated to remain elevated until the election results are announced.
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Experts also expect that volatility will persist or even escalate until the general election results are out. “After the election results are out, India VIX will again dip towards 12-13 levels,” said Meena.
Energy and automobile stocks led the majority of the gains in Nifty 50. Analysts noted that automobile stocks, often considered key economic indicators, surged, buoyed by a positive outlook on the stocks due to signs of revival in the rural economy.
Nifty Auto surged by almost 2 percent with Mahindra & Mahindra and Hero MotoCorp spearheading the gains.
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