Sensex and Nifty 50 came off-lows around noon on May 13 after having declined by nearly a percent. Automobile and oil and gas stocks were the major laggards.

The domestic indices fell after a report revealed a decline in US consumer sentiment to a six-month low driving up short-term inflation expectations.

At noon, the Sensex was down 316 points or 0.4 percent at 72,350 and the Nifty 50 was down 87 points or 0.4 percent at 21,960.

The broader markets also witnessed selling with both BSE Midcap and BSE Smallcap declining by nearly 1 percent.

Sectoral Trend

Excluding Nifty Pharma and Nifty Healthcare, the remaining 11 sectoral indices witnessed selling pressure. Nifty Auto was the worst-hit index as it fell nearly 3 percent dragged down by Tata Motors.

Tata Motors reported robust Q4 FY24 results, with net profit more than tripling year-on-year. While this was welcomed by a section of the Street, it was met with skepticism from others who questioned if the demand momentum would continue. The stock fell nearly 10 percent at open on May 13 at Rs 950.

Fundamental View

Amid uncertainty over the outcome of the general election, India VIX rose over 14 percent and crossed 21.

Anand James, Chief Market Strategist at Geojit Financial Services, drew parallels between the current behavior of the VIX and the period preceding the 2019 electoral results. "Then too, markets had come off peaks in March, and VIX shot up to 28.6," he said in a note.

However, there's a notable difference: in the previous six months before the 2019 election, the VIX fluctuated within a 20-14 range, suggesting an expectation of sustained volatility. In contrast, the recent surge in the VIX from record lows to above 20 has occurred in just two weeks. While this suggests potential for further upside in volatility based on recent trends, the rapid rate of change in the VIX may lead to a cooldown, possibly even before the election results are announced, James said.

Technical View

"May 9's low coinciding with the 89EMA at 21,900 serves as immediate support, followed by previous swing lows in the 21,800-21,700 range," said Sameet Chavan, Head Research, Technical and Derivative - Angel One. "On the upside, the zone between the 20 and 50EMA, around 22,200 - 22,300, presents a formidable obstacle," Chavan said.

Key Nifty gainers

Cipla, Asian Paints, HDFC Life, Divi's Labs

Key Nifty losers

Tata Motors, Hero MotoCorp, IndusInd Bank, BPCL

Key Sensex gainers

Asian Paints, HDFC Bank, L&T, TCS

Key Sensex losers

IndusInd Bank, SBI, NTPC, Bharti Airtel

Stock moves

Bank of India: Shares tumbled over 11 percent after the lender's margins contracted by 23 basis points (bps) year-on-year (YoY) in the January-March quarter (Q4FY24).

ABB India: Shares jumped over 7 percent after the company's March quarter earnings beat Street expectations.