Weekly Market Wrap: Sensex, Nifty 50 (NSEI) Down 2%; Crypto Experts Predict Ongoing Volatility

• Indian equity indices, the Sensex and the Nifty 50, closed in the green on Friday, May 10, due to buying in shares of select heavyweights, including ITC, Reliance Industries, Bharti Airtel, NTPC, Hindustan Unilever and Power Grid.
• Despite Friday’s gains, the Sensex and the Nifty 50 ended about 2 per cent lower each for the week ended May 10, with the BSE Midcap and Smallcap indices falling 3 per cent and 4 per cent, respectively.
• Investors lost nearly ₹10 lakh crore in a week as the overall market capitalisation of the firms listed on the BSE dropped to nearly ₹396.6 lakh crore on Friday, May 10, from nearly ₹406.2 lakh crore on Friday, May 3.

Indian stock market ends the week in the red despite Friday’s gains, with investors losing nearly ₹10 lakh crore in a week. The market is expected to remain volatile in the short term due to the upcoming general election outcome.

Domestic Factors Outweigh Global Cues

The Indian stock market has recently moved in contrast to its major global peers, with domestic factors outweighing global cues. The sharp selling by foreign portfolio investors (FPIs) ahead of the general election outcome has been the primary reason behind the domestic market’s decline. Additionally, the market has discounted several positives and lacks fresh triggers to sustain gains and move higher.

Market Performance on Friday, May 10

On Friday, the Sensex snapped its three-day losing run to close 260 points, or 0.36 per cent, higher at 72,664.47, with shares of ITC, Reliance Industries and Bharti Airtel among the top contributors to the gain. After five consecutive days in the red, the Nifty 50 ended 98 points, 0.44 per cent, higher at 22,055.20. The BSE Midcap index rose 0.81 per cent while the Smallcap index increased by 0.80 per cent on Friday.

Volatility to Continue in Short Term

Volatility gauge India VIX surged over 26 per cent this week, indicating growing uncertainty about the near-term movement of the market. Experts expect volatility to continue in the market before the general election outcome on June 4. Ajit Mishra, SVP- Research at Religare Broking advises not to place undue significance on a single day’s pause and to maintain a negative bias until the Nifty convincingly surpasses the 22,400 level.

Conclusion

With the general election outcome looming, the Indian stock market is expected to remain volatile in the short term. Investors are advised to tread carefully and consult certified experts before making any investment decisions.