Decline in volatility index indicates low downside risk to market

Mumbai, April 24: BSE Sensex gained more than 300 points on Wednesday to continue its bullish trajectory.

BSE Sensex was trading at 74,093 points, up by 355 points. Metal stocks are leading the gains with JSW Steel up more than 2 per cent, Tata Steel up by 1.6 per cent.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said since the US 10-year bond yield continues to remain above 4.6 per cent, FIIs will remain sellers putting pressure on large caps like leading private sector banks. “For long-term investors, this segment is a buying opportunity," he said.

He added that the ability of bull markets to climb all walls of worries is being demonstrated by the ongoing bull market, which has shrugged off all headwinds, be it geopolitical or economic. The Middle East tensions had only a temporary impact on the market. The scaling down of rate cuts by the Fed from six at the beginning of this year to three or perhaps two or even lower also has not impacted the bull run.

The indication from the sharp decline in the volatility index (VIX) by around 20 per cent to 10.2 is that the downside risk to the market is low, he said.