Stock Market Recovers: Sensex and Nifty Bounce Back Amid Global Tensions

Market Recovery Amid Global Concerns

Mumbai: After a shaky start, the stock market made a notable recovery on Thursday, with the benchmark Sensex gaining 185 points and the Nifty closing above 22,700, driven by robust buying in IT and banking sectors alongside a significant rebound in the rupee.

The BSE Sensex, which had plummeted over 2,000 points earlier in the day, managed to close at 73,319.55, reflecting an increase of 185.23 points or 0.25%. Initially, the index opened lower and dropped by 1,588 points to reach a low of 71,545.81 during the first half of the trading session. However, strong buying interest in major IT firms like HCL Technologies and TCS, as well as banking leaders such as HDFC Bank and ICICI Bank, facilitated a recovery, pushing the index to a high of 73,568.54 before the close.

Similarly, the NSE Nifty mirrored this trend, finishing at 22,713.10, up by 33.70 points or 0.15%. The index had earlier dipped by 496.85 points, or 2.19%, before bouncing back to a peak of 22,782.30.

A notable recovery in the rupee, following the Reserve Bank's intervention to limit banks' activities in onshore forward markets, also bolstered investor confidence. The rupee surged by 188 paise, briefly reaching the 92 mark against the US dollar before settling over 150 paise higher.

Investors engaged in bargain hunting, particularly in IT stocks, with HCL Technologies and Tech Mahindra closing nearly 3% higher.

Among the top gainers in the Sensex were Infosys, Tata Consultancy Services, HDFC Bank, Bajaj Finance, Maruti Suzuki India, Titan, Axis Bank, Bharat Electronics Ltd, Kotak Mahindra Bank, and ITC.

Conversely, stocks such as Asian Paints, Eternal, Sun Pharmaceuticals, NTPC, Reliance Industries, PowerGrid, Mahindra & Mahindra, UltraTech Cement, Adani Ports, Bajaj Finserv, and Tata Steel faced declines.

Vinod Nair, Head of Research at Geojit Investments Ltd, noted that Indian equity markets began on a negative note due to renewed threats from Trump regarding Iran, which dampened the optimism from the previous session and led to widespread selling across Asian markets.

The RBI's recent regulatory measures, which included capping banks' net open rupee positions and restricting NDF offerings to corporates, while disruptive in the short term, effectively prompted dollar unwinding and facilitated a significant recovery of the rupee, Nair explained.

In his first national address since the onset of the Iran conflict, US President Donald Trump stated that the US would continue to exert pressure on Iran, indicating that military operations could conclude soon as core strategic objectives are nearing completion.

Following Trump's speech, crude oil prices surged over 7%, with Brent crude, the global benchmark, trading 7.28% higher at USD 108.52 per barrel.

Asian markets closed predominantly lower, with South Korea's Kospi dropping 4.47%, Japan's Nikkei 225 declining 2.40%, Shanghai's SSE Composite falling 0.74%, and Hong Kong's Hang Seng losing 0.70%.

European markets also experienced declines, with Germany's DAX down 1.71%, Paris' CAC 40 falling 0.98%, and London's FTSE 100 slipping 0.12%.

In contrast, the US market saw significant gains on Wednesday.

Foreign Institutional Investors (FIIs) sold equities worth Rs 8,331.15 crore on Wednesday, while Domestic Institutional Investors (DIIs) purchased stocks worth Rs 7,171.80 crore.

On Wednesday, the BSE Sensex had surged by 1,186.77 points to close at 73,134.32, while the NSE Nifty rose by 348 points to finish at 22,679.40.