Following negative indications from global markets, the benchmark indexes Sensex and Nifty 50 fell around 1% on May 13. A survey indicated that US consumer sentiment has declined to a six-month low, raising expectations for short-term inflation.
Investor caution is expected amid pre-election worries, especially with the spike in the India VIX that has added to the anxiety. In early trading today, the India VIX increased by about 14% to 21. Analysts have observed that until the results of the general elections are made public, market uncertainty will exist.
The Indian markets are considered expensive, even though large-cap stocks seem well-valued. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the Nifty is now trading above its long-term average, at more than 19 times its expected FY25 profits. He ascribed this in part to India's economy's potential for GDP growth and better incomes, which are unlikely to be equaled by any other nation in the near future.
The greater profits and potential GDP growth of the Indian economy are partially reflected in the overvaluation. For the ensuing years, no other economy can match that, according to Vijayakumar.
The Nifty 50 was down 183 points, or 0.8 percent, at 21,871, while the Sensex was down 661 points, or 0.9 percent, at 72,003 at 9:45 a.m. 2,189 shares fell, 933 shares increased, and 124 shares stayed the same.
The Nifty 50's trading range was seen by Prasanth Tapse, Senior VP (Research), Mehta Equities, to be between 21700 and 22500. According to Tapse's assessment, Nifty 50 is projected to encounter resistance at 22,500 and support at 21,800.
On May 10, US indexes had trouble rising as data on consumer mood suggested an economic slowdown in the face of ongoing inflation. The US Treasury Yield on the 10-year note then increased from 4.45 percent to 4.50 percent. On May 13, signs of laxity in China and reports of US President Joe Biden's plan to raise tariffs on certain products from the second-largest economy in the world caused Asian indexes to open lower.
In order to learn more about the future direction of interest rates, investors are presently waiting for the publication of US CPI data on May 15.
