The Sensex made a smart recovery on Wednesday afternoon to end higher, after yesterday’s 770 point plunge. The Sensex closed 162 points higher at 36,725, while the Nifty closed the session near the 10,850-mark, led by financial heavyweights HDFC Bank and ICICI Bank. Together, the two accounted for more than 80% on the Nifty’s gains. The Sensex hit an intra-day high of 36,776.31 and low of 36,409.54. Top gainers in the Sensex pack included Bharti Airtel (2.97%), SBI (2.46%), Tata Steel (2.4%), Vedanta (1.94%), NTPC (1.8%), HDFC Bank (1.7%), HCL Tech (1.6%), ONGC (1.5%) and ICICI Bank (1.4%) were among the biggest gainers in the Sensex pack. Auto-maker Maruti Suzuki was the biggest loser plunging 3.64% after the firm announced a two-day suspension of its manufacturing operations at its Gurugram and Manesar plants in Haryana.
Taking stock of the recovery in the stock market, Ajit Mishra Vice President, Research, Religare Broking said that the Indian equity benchmark indices witnessed high volatility in Wednesday’s session, despite supportive global cues. “We continue to maintain cautious stance on the Indian market in the absence of any positive triggers in the domestic markets. We believe the recent measures undertaken by the government could take some time to yield the desired results. Further, uncertainty in global markets would induce more volatility and could negatively impact investor’s sentiments,” Mishra said.
According to Shrikant Chouhan, Senior Vice-President (Equity Technical Research) at Kotak Securities, the markets recovered mainly on the back of Indian rupee, which appreciated by 0.44% from the lows of 72.50. “It seems that RBI must have intervened at the yearly projection levels. Metals and Bank stocks showed signs of short covering, which is positive for the market as these stocks have very high beta and can change the momentum of the market,” he added.
Chouhan said that many FMCG stocks closed lower against the rise in metals and Banks that could be big positive for the market as it implies that investors are ready to shift from defensive sector to high risk sectors or investors are ready to handle risk in the market. Today’s recovery assumes significance as it comes after the Sensex dropped 770 points and the NSE Nifty dived over 225 points registering biggest intra-day plunge in nearly 11 months on Tuesday. Meanwhile, the Indian rupee gained 34 paise (intra-day) to trade at 72.05 against the US dollar.