Stock market: Election uncertainties blocks the Bulls

Posted by Nilesh waghela 

Mumbai: Domestic benchmark indices traded on a weak note on Wednesday, weighed down by losses in banks and FMCG counters. Uncertainity around election outcome and high volatility also kept investors on the sidelines. 

Sectorally, PSU banks and metals gained while realty bled. The pressure on the market now is due to the uncertainty regarding the election outcome.

 There is lots of speculation in the media regarding this and this has added to the uncertainty in the market.

The India VIX spiking 72% from the April lows indicates that high volatility will persist for some more time. 

It is important to understand that VIX is based on Nifty index options prices. The spike in VIX is due to rising volume of options trades. 

Many investors are buying put options to protect their portfolio in case of an unexpected election outcome. 

For long-term investors the ongoing volatility and uncertainty present buying opportunities, said Dr. V K Vijayakumar, Geojit Financial Services.

Another expert says, The Wall Street trading focus shifts with concerns over a potential U.S. interest-rate cut following a weak jobs report. John C. Williams' Fed remarks add to speculation. 

Nifty's bullish momentum faces hurdles due to lackluster Q4 Indian corporate earnings, as India VIX surges. 

Technical analysis suggests a risk-on approach if Nifty holds above 22137, with key levels at 22307 and 23000.

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