30 May , 2024 By : Debdeep Gupta
The Sensex and Nifty 50 extended their losses from early trading hours on May 30 as the monthly expiry of derivatives contracts loomed. IT and metal stocks exerted downward pressure on the Nifty 50.
According to Gaurang Shah, Senior Vice President at Geojit Financial Services, the market is expected to experience choppy and volatile conditions due to the Nifty derivatives contract expiry. Additionally, the rising India VIX suggests heightened market choppiness until the election results are announced on June 4.
India VIX, indicating market volatility, was down 0.5 percent at 24, having surged from 10 within the past month.
Both BSE Midcap and Smallcap indices declined by 0.8 percent.
At 12:15 pm, Nifty 50 was down 0.6 percent or 140 points at 22,566 and Sensex was down 0.55 percent or 4oo points at 74,100.
Sectoral Trend
Today, Nifty experienced a decline primarily driven by weakness in oil and gas, as well as IT stocks.
Most of the 13 sectoral indices witnessed a downturn. Nifty Bank and Nifty Private Bank, which gained nearly 1 percent in early trading, turned flat.
Among these sectors, Nifty Metal witnessed the most significant decline, dropping over 2 percent, largely influenced by losses in Tata Steel and JSW Steel. Tata Steel shares recorded a 4.5 percent decrease following the company's report of a 64 percent decline in net profit for the quarter ended March.
Fundamental View
"A question which most investors/traders are asking now is, what should be the best investment/trading strategy in this volatile time," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. "There is no simple answer to this question. One strategy is to remain calm, watch the event, and take a decision after the election outcome. Put options are very expensive now and trying to hedge through put options will have a high price," he said.
Technical View
The 22,500 level is considered as a crucial support level for Nifty 50, said Sameet Chavan, Head of Research, Technical and Derivative at Angel One. "On the higher end, the bearish gap of 22,825-22,860 is to be seen as an intermediate hurdle," he said.
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