Can the rally in markets for second day sustain in the coming days?
Answer
Answer
Monday was the second consecutive day of positive action in the stock markets as indices rallied sharply in continuation of Friday action. BSE Sensex jumped up by 593 points or 1.59% and got within hitting distance of the 39,000 mark.
On the BSE Sensex index, 27 out of the Sensex 30 stocks or 90% of all stocks in the index closed in the positive territory with buying and short covering seen across the board. The Sensex has gained over 1400 points or 50% of its previous week’s loss in just 2 days.
The good news in data terms is that the India VIX or volatility index has dropped by 5% to 19.6 levels. Even the mid cap and small cap indices rallied by over 2.5% on Monday. This low VIX is a signal that downside risk may be limited after the ferocity of the bounce.
Oil prices came under pressure on demand worries, global markets across Asia, Europe and the US rallied. Sentiments should favour the 3 IPOs this week viz Mazagon, UTI AMC and Likhitha Infrastructure. It should also help the listing of CAMS and Chemcon Specialty.