How do you see the stock market spanning for 24th May, and do you see gains sustaining on Tuesday?

On Monday, the big hallmark of the Nifty was the huge bouts of volatility during the day. Nifty opened strong and oscillated between gains and losses a number of times. However, the Nifty closed in the red about 51 points lower for the day. The big losers were the steel companies like Tata Steel and JSW Steel that lost over 12% on export worries.

IN terms of the market structure, the advance decline ratio of the Nifty stood at 25:25 with auto stocks leading the market and metal stocks putting pressure. Auto stocks gained substantially due to lower steel prices and lower fuel prices; which improved affordability of these products. VIX was slightly higher at 23.40 levels, but high in absolute terms.

FPIs net sold Rs1,951 crore as domestic funds and LIC bought stocks worth Rs.1,445 crore on Tuesday. There has been no let up in FPI selling over the last 7 months now. On Monday, Dow gained 529 points and NASDAQ 136 points as stability returned to US markets led by Apple. Europe gained 1.5% on average while SGX Nifty is trading positive in early trades.

The market met with selling pressure on every bounce which explains the oscillation. For now, auto stocks will gain and metals will be under pressure. There is the overhang of the FOMC minutes on Wednesday but government is now aggressive on inflation control and that is good news. However, market strength signals are still fairly elusive.