Market: Volatility sets in; India VIX surges 4%

Markets continue to swing on the either side of dotted lines with the benchmark indices having turned flat in late morning trades. At 1130 hrs, the Sensex was down a point at 21,918 and the Nifty was at 6,527.

Meanwhile, the broader markets firmed with both the mid and smallcap indices up 0.5% each.

Capital Goods and Realty indices up 2% each were the top sectoral movers along with the banking index which gained over 1%.

Meanwhile, IT index down over 1% was the top loser. Metal, Consumer Durables, Auto, FMCG and Health Care indices slipped 0.2-0.8%.

Among individual stocks, HCL Infosystems surged 20% to Rs 34.10 on back multiple bulk deals on the NSE and BSE.

Infotech Enterprises is trading higher by 3% at Rs 353 after the company has announced that its wholly owned subsidiary, Infotech Enterprises America, Inc. has signed a definitive agreement to acquire Softential, Inc.
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(Updated at 1130 hrs)
Market turned flat amidst a choppy session which saw key benchmark indices surge to their record high levels only to edge lower later. Market is expected to be

India VIX, a key measure of market’s expectation of volatility over the near term, surged over 4% to 17.4 levels.   

The 30-share BSE Sensex edged lower after touching its record high levels on Monday; it is currently trading 36 points lower at 21,883 levels and the 50-unit NSE Nifty was down 9 points at 6,517.

The Sensex's all-time high of 22,005.54 points marked its third consecutive record high in as many sessions, while the Nifty hit a second consecutive milestone at 6,545.10 points.

"As we had a sharp rally in near term, index is expected for a small correction whereas support is expected around 6450 and has stiff resistance at 6550, trade above this level would open doors for 6620. Best trading strategy for traders to trade in nifty would be buy only above 6550 with a near term target of 6620," said technical analyst at Nsetoday.com

Market experts attributed the exuberance in market to consistent buying from foreign institutional investors (FIIs) in the past seventeen consecutive sessions.

FIIs bought shares worth Rs 5,044.54 crore in the week, including provisional data of March 7.

Broader markets currently outperform the benchmark stock indices. Both BSE mid-cap and small-cap indices are up between 0.4-0.5 percent.

L&T, Reliance, HDFC Bank, Bharti Airtel and SBI shares are the top Sensex gainers at this hour.

Globally, the standoff between Russia and Ukraine is being watched keenly by the markets. With the Russian government paying no heed to the plans set forth by the US and European Union, markets continue to remain nervous.

Japanese shares slipped from a five-week high on Monday morning as disappointing Chinese trade data and uncertainty over the crisis in Ukraine prompted investors to lock in recent gains. Although the US jobs data released on Friday was surprisingly strong, it provided limited support because it also cemented expectations of a further reduction in US monetary stimulus

Asian stocks slipped in early trade on Monday and the dollar stepped back from its recent highs as disappointing Chinese trade data and uncertainty over the crisis in Ukraine kept risk appetite in check.

US non-farm payrolls came in stronger-than-expected with data showing employers had added 175,000 jobs to their payrolls last month, up from 129,000 new positions in January.

Rupee

The market ignored stronger-than-expected US nonfarm payrolls report, which showed employers had added 175,000 jobs last month, up from 129,000 new positions in January.

The rupee is trading at 61.21 versus its close of 61.08/09 on Friday, tracking losses in most other Asian currencies after the better-than-expected US payrolls data.

Traders expect the pair to hold in a 61.15 to 61.45 range during the session.

Sectors & stocks

Among sectors, BSE capital goods index is up almost 2%. Crompton Greaves, BHEL and L&T, from the space, are up between 2-3% in morning deals.

BSE Realty and Bankex are the other top-performing sector indices at this hour. IndusInd Bank is up almost 5% on BSE while Bank Of Baroda and Yes Bank are the other top gainers among heavyweight banking stocks at this hour.

Industrial production data for January will come out on Wednesday. The consumer price index (CPI) for February will be announced on Wednesday, while data for inflation based on the wholesale price index (WPI) is due on Friday.