Stocks were trading subdued, with the measure of volatility spiking to near two-year highs as investors digest the recent spate of selling by foreign investors.

Benchmark indices Sensex and Nifty 50 were down on the afternoon of May 21, weighed by shares of financial services and information technology. IT companies - which derive significant revenue from the US - declined on concerns over US interest rates staying higher for longer, after some Federal Reserve officials appeared cautious on inflation.

The India volatility index, or India VIX, spiked over 8 percent to levels of 22.3 in intraday trade, marking a 23-month high ahead of the June 4 election results and selling by foreign investors.

At 11.00 am, the Sensex was down 157 points or 0.2 percent at 73,847 and the Nifty 50 was down 23 points or 0.1 percent at 22,478. About 1,432 shares advanced, 1,894 shares declined, and 138 shares remained unchanged.

In the broader market, both the BSE Midcap index as well as the BSE Smallcap index were flat-to-negative during afternoon trade.

Among individual stocks, Nestle India fell over 2 percent, emerging as the top loser on the Nifty 50 index.

Sectoral Trend

IT and financial services stocks weighed on the benchmark indices, while Nifty Metal was the top gainer amongst sectoral indices, with Tata Steel and Hindalco leading the gains.

Fundamental View

"The prime minister has hinted at a sharp rally in the market after June 4th. The market is likely to move ahead before the election results since the market is smart enough to anticipate the results," said V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services.

Vijayakumar said the Q4FY24 results have been generally good. "Among sectors - financials, particularly banking, automobiles, particularly two-wheelers, capital goods, real estate, and pharmaceuticals have come out with impressive results and their prospects, too, look good," he said. He added that these sectors are likely to lead in case of an election results-related rally.

Technical View

Nifty 50 can find support at 22,400 followed by 22,350 and 22,300, said Deven Mehta, Research analyst at Choice Broking. "On the higher side, 22,600 can be an immediate resistance, followed by 22,650 and 22,700," he said.

Key Nifty gainers

Coal India, Hindalco, JSW Steel, Tata Steel

Key Nifty losers

Nestle, SBI Life, TCS, UltraTech

Key Sensex gainers

Tata Steel, JSW Steel, Power Grid, Asian Paints

Key Sensex losers

Nestle, HUL, TCS, UltraTech

Stock moves

Bharat Electronics: Shares zoomed 8 percent to hit a fresh record high of Rs 283 apiece, a day after the company reported above-estimate earnings for the quarter that ended March 2024, driven by better-than-expected EBITDA margin, PAT, and strong revenue growth.

Shriram Properties: Share price jumped nearly 3 percent intraday after the company signed a joint development agreement for a four-acre land parcel in Bengaluru.