Stocks wilt as Street vigil on polls raises fear factor
₹6,994.86 crore worth of shares. The correction may not be over yet, either: huge bearish bets on the Nifty and Bank Nifty futures contracts signal that the decline may extend till the end of the month. The nervousness on the Street was reflected by fear gauge India Vix closing at a 20-month high of 18.2.
The broader markets saw worse: Nifty Smallcap 250 fell 2.65% to 15,006.35, while the Nifty Midcap 150 tumbled 1.74% to 18,245.35. Domestic institutional investors net-purchased a provisional ₹5,642.53 crore, but selling by retail and high-net-worth investors added to the selling pressure. On BSE, this category net-sold shares worth ₹118.10 crore, while figures on the National Stock Exchange (NSE) were not available.
Investors saw their total wealth being eroded by ₹7.28 trillion. “The pullback is because of creeping uncertainty about the victory margin of the incumbent and in-line results amid lofty valuations across many pockets of the market," said Andrew Holland, chief executive of Avendus Capital Public Markets Alternate Strategies. Holland expects the pressure to persist until the votes are counted.
However, other analysts expect limited downside for the Nifty, with the index having pulled back 3.7% from its record high of 22,794.7 on 3 May. Gaurang Shah, senior vice-president, Geojit Financial Securities expects the market to find support at 21,800. He said short- to medium-term investors should book profits while those in “for the long haul" should use the correction as a buying opportunity .
“A correction before the event is good for the markets. I am bullish power, defence, banks, NBFCs (non-banking financial companies) and autos that are good buys," he added. HDFC Bank contributed 60 points of the Nifty’s
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