Indian stock markets face volatility despite FII support
Despite FII support, Indian markets showed volatility, with Sensex and Nifty opening mixed. Increased short positions by foreign investors hint at continued instability. Sectoral indices mostly gained, except IT. Global markets also displayed weakness, contributing to a cautious trading environment.
New Delhi [India], May 19 (ANI): Indian stock markets opened on a flat note on Monday, indicating ongoing volatility.
The Nifty 50 index began the day at 25,026.20, registering a small rise of 6.40 points or 0.03 per cent. On the other hand, the BSE Sensex opened lower at 82,279.49, down by 51.10 points or 0.06 per cent.
According to market experts, foreign investors increased their short positions in the derivatives segment during the last trading session. This move suggests that markets could remain volatile in the coming days.
VK Vijaya kumar, Chief Investment Strategist, Geojit Investments said "The prime mover of the ongoing rally in the Indian market is the sustained FII inflows of around 23800 so far this month. An apparently perplexing trend from the last trading day is that the market declined despite 14018 crores of institutional buying (FIIs plus DIIs). This indicates that FIIs are increasing their short positions in the derivatives market. So expect more volatility ahead".
He further added "An important trend in the market is the sharp rally in defence stocks. Even though this segment has bright medium to long-term prospects, their valuations have become excessive and, therefore, investors have to be extremely cautious. Some profit booking in this segment would be appropriate."
At the sectoral level, most indices were trading in the green at the time of filing this report. Nifty Auto saw a healthy rise of 0.55 per cent, while Nifty Pharma gained 0.49%. Nifty FMCG was almost flat with a marginal gain of 0.02 per cent. However, Nifty IT was the only major sector trading in the red.
In the broader Asian markets, sentiment remained weak. Japan's Nikkei 225 index declined by 0.36 per cent, Hong Kong's Hang Seng index was down 0.38 per cent, and Taiwan's Weighted Index fell by 0.54 per cent. South Korea's KOSPI saw a sharper fall, dipping by more than 1 per cent during the early trade.
Overall, mixed global cues and increased short positions by foreign investors are keeping traders cautious as they look ahead. (ANI)