Stock market today: Sensex, Nifty 50 rise for 2nd consecutive session; India VIX hits fresh 52-week high

Stock market today: The Indian stock market continued to endure strong bouts of volatility as the index measuring market volatility surged by over 16 per cent, reaching a fresh 52-week high of 21.49 during the session. Still, market benchmarks the Sensex and the Nifty 50 managed to extend gains intot the second consecutive session on Monday, May 13.

The market benchmark Nifty 50 opened 27 points lower at 22,027.95 compared to its previous close of 22,055.20 and extended losses to as much as 234 points, or over 1 per cent, reaching the intraday low of 21,821.05.

However, the index saw gains in the final hour of trade which erased all losses of the day, lifting it by 76 points. Consequently, the index closed with a gain of 49 points, or 0.22 per cent, at 22,104.05.

Some 29 stocks ended in the green in the index, with shares of Cipla, Asian Paints and HDFC Life as the top gainers. On the flip side, shares of Tata Motors, BPCL and Shriram Finance ended as the top losers in the index.

Also Read: Top Gainers and Losers today on 13 May, 2024: Cipla, Asian Paints, Tata Motors, Bharat Petroleum Corporation among most active stocks; Check full list here

The 30-share pack Sensex closed the day 112 points, or 0.15 per cent, higher at 72,776.13, with shares of banking heavyweights HDFC Bank and ICIC Bank as the top contributors to its gains. 

Nifty Midcap 100 index rose 0.41 per cent but the Nifty Smallcap 100 index suffered a loss of 0.43 per cent.

Volatility index India VIX ended 11.5 per cent higher at 20.60. 

Among the sectoral indices, Nifty Auto (down 1.7 per cent) and Nifty PSU Bank (down 1.2 per cent) lost significantly, while Nifty Pharma (up 1.77 per cent), Healthcare (up 1.58 per cent), Metal (up 1.31 per cent) and Realty (up 1.23 per cent) clocked gains of over a per cent each.

Nifty Bank rose 0.70 per cent, driven by gains in the private bank stocks. The Nifty Private Bank index clocked a gain of 0.86 per cent.

Why is the market volatile?

Lately, the Indian stock market has been experiencing strong volatility, largely due to significant foreign capital outflow.

As per data available with NSDL, in the current month, foreign portfolio investors (FPIs) had sold Indian equities worth ₹18,375 crore till May 10th.

The rich valuation of the Indian market seems to have prompted foreign investors to sell Indian equities and invest in the Chinese market, which is at an attractive valuation.

"The pressure on the Indian stock market is mainly due to FII selling. This is not because of their concerns regarding the election outcome. That is because of the change in trade from 'sell China buy India' to 'sell India buy China' because of some marginal Chinese economy," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Also Read: Can Indian stock market crash further before Lok Sabha election result?

Caution ahead of the outcome of the Lok Sabha election 2024 has also contributed to the recent volatility in the Indian stock market.

"Though the market reversed from the day’s low and ended up with a marginal gain, investors remain concerned over the progressing general election and high valuation. An absence of major positive triggers and the flight of FIIs from the domestic market will keep the short-term trend weak," said Vinod Nair, the head of research at Geojit Financial Services.

Experts expect the market to remain volatile in the near term. However, some of them say there could be a knee-jerk reaction in the market if the election outcome comes on unexpected lines.

"An expected win by the NDA would be positive for the domestic market, indicating continuity in policy of investment in infrastructure, manufacturing and prudent fiscal management. A narrow win for the NDA may result in short-term market pain but positive overall. The market may see a steep correction if the opposition coalition comes to power," said Shiva Subramaniam, IC member and asset class lead at Whitespace Alpha.

Also Read: Will Indian stock market fall if INDIA bloc comes to power? Here’s what’s netizens feel

For the medium to long term, the outlook for the domestic market remains strong due to its strong growth prospects and hopes of rate cuts.

Priti Goel, the founder & CEO of Prisha Wealth Management Private Limited, observed that India remains a bright spot for investors globally. 

The drivers continue to be favourable demographics (most populous yet median age is 28.2 years), improved household spending (after the pandemic), increased consumption (rising urban incomes), infrastructure investments (decongesting cities, significantly improving travel time and experience both on land and via sea), healthcare, renewable energy alternates, electric vehicles and its infrastructure development, use of AI and technology innovation, digitalisation of payments, education system, concerted efforts towards reducing carbonisation, etc., said Goel.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.