Market recovers: Sensex rallies 470 pts, Nifty tops 10,614; SBI shares up 2% ahead of RBI repo rate decision

A market-wide recovery was seen in the Indian stock markets on Wednesday with Sensex rallying 470 points and Nifty topping 10,614 after a three-day massive plunge while SBI shares gained 2% ahead of RBI’s repo rate decision due later today. Indian equities have witnessed a steep correction in the last three days due to global sell-off and worries over LTCG being taxed. BSE Sensex jumped as much as 470.39 points to hit the day’s high of 34,666.33 and NSE Nifty added 115.75 points to mark the day’s high at 10,614. Shares of India’s largest lender State Bank of India shot up 2.21% to a day’s high of Rs 297.95 and were among the top five gainers out of the Sensex components.

Major movers

Shares of Tata Steel, ONGC, IndusInd Bank, Dr Reddy’s, Tata Motors, Maruti Suzuki, M&M, Adani Ports, Bharti Airtel, Kotak Mahindra Bank, ICICI Bank rose 1-3% in the early morning trades while shares NTPC, HDFC, HDFC Bank, Power Grid and HUL slumped up to 2%. The heavyweight shares of companies such as RIL, ITC, ICICI Bank, SBI, IndusInd Bank, Kotak Mahindra Bank, Maruti Suzuki, ONGC, Axis Bank, Tata Motors, Tata Steel, and M&M contributed the most in the Sensex rally. Collectively these 12 stocks added about 195 to the index. The benchmark Sensex gained 367.36 points to start the at 34563.3 whereas the broader Nifty rose -108.95 points to begin at 10,607.2.

Market at glance

A wholesome recovery was observed in the all broader market and sectoral indices. Among the broader market indices of NSE, other than Nifty 50 index, Nifty Next 50, Nifty 100, Nifty 200, Nifty 500, Nifty Mid100 Free Nifty, Midcap 50 and Nifty Sml100 Free advanced 0.7-2.7%. On the other hand, all of the 11 sectoral indices of NSE surged up in the early session to trade in green with Nifty Realty, Nifty PSU Bank, Nifty Media, Nifty Metal, and Nifty Auto leading the charge while Nifty Bank, Nifty Fin Service, Nifty FMCG, Nifty IT, Nifty Pharma and Nifty Pvt Bank index saw a marginal uptick.

RBI’s bi-monthly policy meeting

The Monetary Policy Committee headed by RBI Governor Urjit Patel began its two-day meeting on Tuesday. Investors are keenly awaiting for RBI’s repo rate decision amid the expectations that the central bank will continue with pause on key interest rate in view of firming inflation. The outcome of the 6-member MPC meeting is due later today. The Reserve Bank of India is expected to maintain status quo tomorrow at the sixth bi-monthly monetary policy meet, while it may sound ‘caution’ on higher crude oil price and fiscal slippage for the third time in a row. “We do not expect the RBI to react tomorrow, however, we do recognise that it will sound cautious on fiscal slippage and rising crude oil price,” Madhvi Arora, Economist at Kotak Institutional Equities told FE Online.

US equities on Tuesday

Meanwhile, US stocks posted sharp gains in another wild trading session on Tuesday, as indexes rebounded from the biggest one-day drops for the S&P 500 and the Dow in more than six years that stalled the market’s record run, Reuters said in a report. Stocks swung from negative to positive after indexes started the session 2% lower, underscoring a return of volatility to a market that until recently was marked by an absence of major shifts, Reuters added. The Dow Jones Industrial Average rose 567.02 points, or 2.33 percent, to 24,912.77, the S&P 500 gained 46.2 points, or 1.74 percent, to 2,695.14 and the Nasdaq Composite added 148.36 points, or 2.13 percent, to 7,115.88.

Indian markets on Tuesday

Earlier yesterday, Indian stock markets ended terribly low witnessing a heavy turmoil in the day with the S&P BSE Sensex plunging 561 points to end at a one-month low as shares of heavyweight companies such as Infosys, HDFC, TCS, ITC, Tata Motors, Reliance Industries, Kotak Mahindra Bank and HDFC Bank dragged heavily. An extremely volatile trading session was witnessed in India’s stock market on Tuesday as the index which measures the volatility — India Vix — shot up 44.23% in the intraday trades to hit a 52-week high of 23.1575 before settling up 24.68% at 20.0150. In today’s volatile trade, 30-share barometer Sensex and wider share indicator Nifty settled at one-month low figures. BSE Sensex shed 561.22 points or 1.61% to conclude at 34,195.94 whereas NSE Nifty crumbled 168.3 points or 1.58% to finish at 10,498.25. During the day, the benchmark Sensex crashed 1,274.35 points to hit a one-and-half-month low of 33,482.81 whereas the broader Nifty plummeted 390.25 points to a low of 10,276.3.