Indian equity indices faced a choppy session on Tuesday. The Nifty 50 and Sensex after opening higher saw a sharp sell-off, but within an hour both the indices rebounded to trade back in the green. The S&P BSE compiled Sensex surged almost 1,200 points from the day’s low. However, it couldn’t sustain the level for 15 minutes and fell again around 1,100 points from the day’s high.
Similarly, the Nifty 50 is witnessing heightened volatility during Tuesday’s trade. It breached below 23,150 to quote at 23,111.10, an intra-day low. The India VIX, India’s volatility index, surged 4.46% to 17.15.
Trent was the major loser in the Nifty 50, falling 4.6%. It was followed by Adani Ports and SEZ, ICICI Bank, NTPC, SBI, and so on.
ICICI Bank, Reliance Industries, Trent, SBI, and M&M share prices saw maximum dent and contributed most to Nifty 50′ fall. Among the sectoral index, the Nifty Consumer Durables and Realty extended their fall, dropping 3%, each.
Also ReadVolatile Tuesday! Sensex rebounds 922 points, Nifty at 23,400 Sensex weekly expiry
Derivates are the only reason as of now behind this volatility, said Ajit Mishra, Senior Vice President of Research at Religare Broking. Sensex’s weekly contracts will expire on January 21. Trump is not such a significant reason markets are reacting to, he added.
Continuous FII selling
Moving ahead, the Indian markets are witnessing an outgoing splurge of FIIs. In January alone the FIIs have sold equities worth Rs 50,912.60 crore. Out of 7 trading days, FIIs were the net sellers in 6 sessions.
Uncertainty over Trump 2.0
Trump 2.0 has begun with limited insight into potential economic decisions, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. During his inaugural speech, he was explicit about immigration but seemed uncertain regarding tariffs. The suggestion of a probable 25% tariff on Canada and Mexico indicates that the policy of increasing tariffs will be enacted incrementally, added Vijayakumar. Also, European markets opened slightly higher after Trump took charge of office on Monday.
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