Stock market: Reason behind Sensex's 1,000-pt recovery amid high volatility

After falling in the early trade, benchmark indices Sensex and Nifty rebounded on Monday afternoon and took stock investors by surprise. The high volatility during the session was captured in India VIX that climbed another 14 per cent intraday, suggesting likely fickleness in the market over the next 30 days. The period coincides with elections outcome, early next month.

Stocks gained as short coverings and buying emerging at lower levels, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Earlier today, Union home minister Amit Shah said one must not connect the recent stock market movements to general elections 2024 and suggested the recent volatility in the stock market could be due to rumours. "I can't anticipate stock market moves. But normally whenever a stable government is formed at Centre, the market sees a rally. I see $400-plus seat wins (BJP/NDA), a stable Modi government coming, and thus market rising," Shah told NDTV.

Besides, speaking at a seminar on Indian Capital Markets at NSE, Mumbai, foreign minister S Jaishankar said its clear where the election is going. "The exact number people may debate, I am sure as the round after round take place. markets will be less volatile.

The fourth phase or round of ongoing elections was underway on Monday.

"Going ahead, markets would take cues from the voter’s turnout data from the 4th phase which has been a major concern so far. Also, India’s retail inflation will be released later today," said Khemka of Motilal Oswal said. .

The BSE Sensex was up 72,763.68, up 99.21 points or 0.14 per cent. The index hit a low of 71,866.01 in the morning, before staging a smart rebound as the session progressed. It hit a high of 72,863.56, up 997.55 points intraday. Similarly, the NSE Nifty was moved past 22,100 level after hitting a low of 21,821.05 intraday.

Asian Paints climbed 3.8 per cent to Rs 2,878 level. TCS, Sun Pharma and a couple of private lenders such as HDFC Bank Ltd, ICICI Bank Ltd and Axis Bank Ltd advanced over 1 per cent each. Larsen & Toubro, Tata Steel, Power Grid and UltraTech Cement and Kotak Mahindra Bank also gained. Tata Motors plunged over 8 per cent on weak Q4 results. NTPC, Bharti Airtel, State Bank of India and Titan Company fell over 1 per cent each.