Sensex rose 128 points in volatile trade on Tuesday as foreign institutional investors sold Rs 1,261.19 crore shares and domestic financial institutions bought Rs 851.32 crore shares
The markets snapped its seven-session losing streak as the uncertainty surrounding the Delhi elecitions was laid to rest with the results.
Sensex gained 128.23 points (0.45%) while Nifty rose 39.20 points (0.46%) ending the day at 28355.62 and 8565.55, respectively.
Among sectoral gainers, CNX PSU Bank led the pack with gains of 1.91% followed by Bank Nifty (up 1.89%) and CNX Auto (up 1.71%). Thirty two stocks on the Nifty gained, 17 declined and one remained unchanged.
The bank Nifty has fallen almost 2700 points since the start of February moved up significantly lifting the broader indices. It constitutes almost a quarter of broader Nifty.
The markets gained amid heavy selling from foreign institutional investors (FIIs), which stood at Rs 1,261.19 crore, – the highest this month so far -- while domestic institutional investors (DIIs) bought shares worth Rs 851.32 crore. The tussle between the bulls and the bears led to a highly volatile session with the broader index moving as much as 450 points during the day.
G Chokkalingam, founder & managing director, Equinomics Research and Advisory, said, traders who had build short positions on the eve of Delhi elections are now squaring off their positions post the results."
FIIs have been net sellers in the market since the start of February, barring February 5 when they turned net buyers. January saw heavy buying especially in the second half by FIIs as they infused liquidity worth Rs 17,689 crore in the Indian markets.
Chokkalingam said from the recent trend it can be observed that DIIs are taking a contra call depending on FII moves, while the latter behave independently.
The December quarter corporate earnings have remained dismal with the asset quality concerns among the PSU banks clearly visible, while capital goods major L&T posted abysmal set of numbers. Meanwhile, the uncertainty surrounding Greece and the disappointing trade data from China has left the global indices jittery, including India.
Mayuresh Joshi, VP- Institution, Angel Broking, said the discouraging corporate earnings along with negative global cues from Greece and China may have led to the FII selling.
The GDP growth data released by the Central Statistical Organisation pegged the growth rate at 7.4% for the current fiscal. As per experts, the GDP data released on Monday also acted as a catalyst to the market upmove.
India VIX, index measuring the volatility is down 3.74% on Tuesday at 21.1925 points.
Chandan Taparia, analyst, derivatives and technical, Anand Rathi Securities, said VIX and the market have an inverse relationship and post the culmination of a major event, the VIX tends to come down. He also expects the markets to recover as a result of the fall in the volatility index.
"We are observing fresh put writing after long time at 8500, thus we believe the level of 8450-8500 to be the immediate support level for the Nifty." he said.
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