Sensex, Nifty recover after 6% crash; FMCG stocks gain
On Wednesday, the Sensex and Nifty rebounded from a 6% crash experienced in the previous session. Market experts suggest this slump presented a buying opportunity for investors.mThe recovery was led by gains in FMCG and IT stocks, while power and construction stocks faced selling pressure. The Nifty FMCG index rose over 4% with HUL, ITC, and Britannia gaining between 2.4-6.4%.
Market volatility expected amid government formation uncertainty
Senior Vice President at Geojit Financial Services, Gaurang Shah, predicts that markets will likely remain volatile until there is clarity on the government formation. Despite the previous session's sell-off and recovery, he anticipates some buying at lower levels. By 10:30 am, the Sensex had risen by 680 points or 0.9% to reach 72,773, while the Nifty was up by 236 points at 22,118.
Major contributors and laggards in the market recovery
HDFC Bank, HUL, and ITC were the major contributors to Nifty's gains. On the other hand, NTPC, Hindalco, and L&T were identified as significant laggards. Hindalco shares fell nearly 5% following the company's decision to postpone Novelis's IPO. PSU stock BEL also experienced a drop of over 5% after brokerage firm CLSA downgraded it from "buy" to "outperform."
Market resilience amid political changes advised
Pradeep Gupta, co-founder and Vice-chairman of Anand Rathi Group, believes that markets are expected to recover and potentially thrive in the long term if policy continuity is maintained. He advised traders to remain resilient against political changes to navigate market volatility. This advice comes after the Nifty recorded its worst session in over four years on June 4 due to election results uncertainty.
Market fluctuations expected amid government formation
Deepak Jasani, Head of Retail Research at HDFC Securities, suggested that the Nifty could fluctuate between 21,710-22,417 in the near term due to uncertainty over the final outcome and formation of the new government. This comes after indications that the incumbent Bharatiya Janata Party might need alliance partners to secure a third term in power. Investors are now awaiting further insights from government policy direction and the upcoming Union Budget.
