Even as the markets continued to hit record highs, the Indian Volatility Index (VIX) rose 8.57%. Benchmarks on Monday rallied in anticipation of strong quarterly results and optimism around the budget. Information technology (IT) and auto stocks have helped push the markets up. The Nifty jumped 137.5 points (0.96%) to close at 14,484.75 while the Sensex rallied 486.81 points (1%) to close at 49,269.32.
HCL Tech was the top winner in the Sensex pack, with a 6.09% jump, followed by Infosys, HDFC, Maruti, Tech Mahindra, Bajaj Auto and M&M. In contrast, Bajaj Finserv, Bajaj Finance, Reliance Industries, L&T, Kotak Mahindra Bank and SBI were among the laggards, losing up to 1.92%.
India VIX, also known as the Market Fear Gauge, zoomed in during the session. It ended at a 20 day high. The fear gauge helps investors and traders predict volatility expectations over a period of around 30 days. India’s VIX index zoomed 8.57% to close at 22.38. Its previous close was at 20.64. Experts believe the VIX has zoomed in due to weakness in the broader market and bank stocks.
The larger stock indices, Nifty Midcap 100 and Nifty Smallcap 100, fell 0.24% and 0.04%. The banking index, Nifty Bank, fell 0.27%.
Gaurav S Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas, said: “Basically the Nifty went higher led by selected stocks belonging to the IT sector, and the market as a whole remained under pressure, which led on the rise in volatility. Market volatility is expected to increase ahead of budget. “
Benchmarks rebounded on large purchases of IT securities after remarkable results published by Tata Consultancy Services (TCS). Investors expect a good quarter for IT companies, which will cause their stock prices to soar on Monday. The Nifty IT index rebounded 3.31%. Shares of TCS climbed 1.59% to close at Rs 3,170.45. The tech giant’s market capitalization crossed Rs 12 lakh crore during the trading session.
The biggest winners of the Nifty IT index were HCL Technologies, Infosys, Wipro, L&T Infotech and Mphasis with gains of 5.89%, 4.87%, 3.92%, 3.86% and 3.72 %, respectively. Brokers expect the IT sector to lead the earnings recovery in fiscal 2022.
Motilal Oswal in his report said, “In FY 22, we expect BFSI, Auto, IT and Reliance Industries to lead the profit recovery.” He expects a healthy order pipeline and significant deal signings to lead IT companies to outperform in the third quarter, as opposed to companies’ guidance in the second quarter of fiscal 21.
Foreign portfolio investors bought shares worth $ 418.5 million, while domestic institutional investors sold shares worth $ 348 million.