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Sensex, Nifty fall over 1%, but recover later

Markets recouped early lows on buying in HDFC Bank, ICICI Bank and TCS

Sensex, Nifty fall over 1%, but recover later
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Investors remain concerned over the progressing general election and high valuation. An absence of major positive triggers and the flight of FIIs from the domestic market will keep the short-term trend weak, said Vinod Nair, head (research), Geojit Financial Services

Mumbai: Benchmark Sensex and Nifty staged a dramatic rebound on Monday to settle higher following buying in HDFC Bank, ICICI Bank and Tata Consultancy Services (TCS). Helped by buying at the fag-end, the 30-share BSE Sensex closed higher by 111.66 points or 0.15 per cent at 72,776.13. The index opened lower and plummeted further 798.46 points or 1.09 per cent to hit a low of 71,866.01 in day trade. The NSE Nifty rose by 48.85 points or 0.22 per cent to 22,104.05. The 50-issue rebounded around 310 points from the day’s low of 21,821.05 and hit a high of 22,131.65.

Vinod Nair, head (research), Geojit Financial Services said: “Though the market reversed from the day’s low and ended up with a marginal gain, investors remain concerned over the progressing general election and high valuation. An absence of major positive triggers and the flight of FIIs from the domestic market will keep the short-term trend weak.” “The week kicked off with market volatility, but by the end, it managed to eke out marginal gains. Initially bearish sentiments gave way to a recovery, particularly among key heavyweights, which not only erased losses, but also propelled the index to close near the day’s peak,” said Ajit Mishra, SVP (research), Religare Broking Ltd.

Experts said that market volatility was high amid the ongoing Lok Sabha polls. As many as 96 seats went to polls in the fourth phase of elections on Monday. “VIX’s rise from record lows to above 20 now, has unfolded in just a fortnight’s time. So, while recent history points to more room for upside in VIX and thereby volatility, the abruptness in the rate of change of VIX, may lead to a cool off, perhaps even before the electoral results,” Anand James, Chief Market Strategist, Geojit Financial Services said.

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