Nifty witnessed high volatility due to rollover movement on October F&O expiry day amid negative global cues on October 29.

During this week, the index failed to break the round number resistance of 12,000 and witnessed sharp profit-booking in the index pivotal.

Bank Nifty outperformed the broader markets and gained 17.8 percent while Nifty gained 8 percent in the October F&O series.

Among other sectors, IT gained 10 percent, Metals 9.3 percent and Auto 5 percent. Pharma and FMCG remained flat to negative, trading sideways, witnessing a time correction over the last few weeks.

Nifty closed at a 3-week low at 11,671 on October 29 and the breakdown of the 50-day average at 11,540 would accelerate the second round of profit-booking pushing the index lower to 11,200.

On the higher side, a crossover of 12,000 would give a sharp breakout for a new high. Mid-caps and small-caps may outperform.

India VIX has closed at a 3-month high at 24 levels and we expect volatility to increase with news flow of fresh lockdown due to COVID-19 in various parts of the world and presidential elections outcome in the USA next week.