Stock Market: Fear grips street amid volatility spike

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Sensex stays on losing spree as banks, realty crack

By S Jha

New Delhi, May 7: In three trading session, the Indian equity markets have ripped apart valuations of ₹10 lakh crore. Nifty is precariously sitting at an edge of 22300. Sensex is on the slide. Bank Nifty is on slippery grounds.

Nifty lost a whopping 140 points on Tuesday. Bank Nifty shed almost 610 points. Sensex ended lower by 383 points.

The market participants are holding consensus view that the poll-induced volatility is shaking off the street. The fear factor is intense.

A street also lighted the confirmation signals of fear let loose. The FMCG sector was rallying on a day when all was sinking. The likes of Marico, Hindustan Unilever, ITC, and others were firm.

The old timers assert that the strength in the FMCG counters is an indication of the market turning defensive. Marico led the gains in the FMCG counters.

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The Bank Nifty cracked first in the day. The street had green light in the early sessions. But the lights soon turned red. Bank Nifty dived. Nifty followed in the footsteps.

Bank Nifty has lost 1100 points in just five days of sessions. The weakness in the Bank Nifty came following a rally in the bond yields in the US market. The weakness also follows the US Federal Reserve dropping signals that rate cuts are now distant.

The realty sector was the worst performing pack on Tuesday. In anticipation of rate cuts, the realty sector had galloped. The likes of DLF and Sobha had almost been competing with multibaggers in the recent months.

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With rate cut hopes now subsiding in the face of hot inflation in the US, the banking and the realty sectors are taking beatings on the street.

Along with banking and realty, the PSU pack is also taking sever beating in the street. This is seen by market participants as signs of the investors becoming wary of the uncertainty of the Lok Sabha elections.

The market participants also saw investors taking interest in the IT pack. Tech Mahindra, TCS, and Wipro showed signs of life. The IT sector has been down and out for several months. The market participants are looking at IT as low-risk sector amid heightened volatility.

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