Market recovers from its lows, Metal records sharp gain
Both the benchmark indices closed the session with positive gains experiencing a notable recovery from its lows on Tuesday.
VIX is now much above when Nifty plunged to sub 19000 levels in late October, warning that the volatility expectations are significantly higher now said Anand James, Chief Market Strategist at Geojit Financial Services.
“While outlining the possible outcomes of this week, we had provided for reasonable upsides, but had underestimated the strength of the underlying uptrend, which would breach our objective of 21540 and push much further up. This opens up potential for 21860. However, we note with concern, the rise in VIX that has uncharacteristically accompanied yesterday’s rise in Nifty,” James said.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said the rally looks set to continue supported by the leading banks which are witnessing institutional accumulation.
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He said that the strong cues from the mother market US, steadily declining US bond yields and the dollar index below 101 augur well for the continuation of the rally.
He said that it is important to note that high quality large caps have taken the leadership in this rally which has taken the Sensex above 72k.
He said that a significant market indicator is the volatility index VIX rising above 15. Investors should take this as an indication of high volatility ahead.
He said that the remaining invested is important in a bull market but chasing the market at high valuations would be highly risky.
He said that the BSE Sensex is up 133 points at 72172 points on Thursday. NTPC is up more than 2 per cent.
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