Volatility will continue today
The sentiment on D-Street is fragile that despite opening higher in the previous session, the markets fell like ninepins in the last hour of trading session and moreover, Nifty breached its 9,000 mark. SGX Nifty is indicating a flat start as its up by two points at 9,007 levels but the only question that remains are these opening gains sustainable? Well, with the kind of sentiment we are in, rallies are temporary strength and selling on temporary strength would be the theme of the day. Also, volatility will continue and it will be the focal point of today’s session as the volatility index India VIX is trading at record levels.
Asian markets are trading mixed on Wednesday. Japan’s Nikkei 225 is up by 1.60 per cent and China’s Shanghai Composite has added 1.16 per cent while, Hong Kong Hang Seng has dipped 0.11 per cent.
Back home, for a change, markets started off the session in a positive but at the close, it was same old story as the key benchmark indices reversed its gains and ended lower by two and a half per cent amid intense selling pressure in the last leg of trade. Nifty closed below the important psychological 9,000 level and BSE Sensex slipped below 30,600 mark. The broader markets Nifty Mid-cap and Small-Cap lost 2.52 and 2.96 per cent, respectively. On the sector front, barring Nifty FMCG and Nifty Pharma, all the indices ended with losses, wherein Nifty Media, Nifty Financial Services and Nifty Bank were the biggest losers. The volatility index continues to surge further and is at record levels since 2008.
On Tuesday, US stocks ended on a buoyant note; however, initial part of the session was a volatile one. The sentiment turned bullish on Wall Street following comments from Treasury Secretary Steven Mnuchin at White House press briefing, where he said that Trump administration was considering offsetting the economic burden of Coronavirus pandemic by immediately sending checks to Americans. Further, some reports indicated that Trump administration is considering a fiscal stimulus package to cope up with the economic fallout of Coronavirus, which would be the most far-reaching economic rescue package since the Great Recession of 2008. At close, Dow jumped 5.2 per cent, Nasdaq spiked 6.2 per cent and S&P 500 ended higher by six per cent. Following the footsteps of US, European indices too ended in green after White House briefing.