Benchmark equity indices staged a strong intraday recovery on Thursday, led by value buying in IT and banking stocks, along with short covering on weekly F&O expiry.
Geopolitical Jitters
Earlier in the session, markets had slumped by up to 2.19%, tracking weakness in Asian peers after US President Donald Trump warned of potential attacks on Iran’s power and oil infrastructure if no deal was reached.
The Sensex plunged 1,588.51 points, or 2.17%, to an intraday low of 71,545.81. However, it later erased all losses and ended with modest gains. The index rebounded 1,773.74 points, or 2.48%, from the day’s low to close at 73,319.55, up 185.23 points, or 0.25%.
Similarly, the Nifty dropped 497 points, or 2.19%, in early trade but later surged over 530 points, or 2.39%, from its intraday low. It settled at 22,713.10, up 33.70 points, or 0.15%.
“Market sentiment turned negative after fresh comments from the US President dampened hopes of a near-term resolution, while escalating rhetoric over potential ‘extremely hard’ attacks on Iranian power and oil infrastructure weighed on sentiment,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.
Ajit Mishra, SVP – Research at Religare Broking, said the initial sell-off was triggered by renewed geopolitical concerns, which pushed crude oil prices higher and pressured global markets.
However, a recovery in the rupee, oversold conditions, and short covering ahead of the long weekend aided the rebound, he added. Brent crude surged 9% to $109.74 per barrel.
Broader markets were mixed, with the BSE Midcap index declining 0.21%, while the BSE Smallcap index rose 0.28%.
Turnaround
Among sectors, IT, realty, metals, private banks, and financial services led the gains, rising up to 2.60%.
The Nifty IT index, after falling 1.16% intraday, rebounded sharply to close 2.60% higher, emerging as the top sectoral gainer. The Bank Nifty, which had dropped 2.90% during the session, ended marginally higher by 0.19%. The Nifty Realty index also recovered, closing up 1.07% after declining as much as 3.96% earlier.
Across Asia, India and the Philippines were the only markets to close in the green. South Korea led the losses with a 4.47% decline, followed by Japan, Indonesia, Taiwan, and China.
Foreign portfolio investors sold shares worth ₹9,931.13 crore, while domestic institutional investors bought ₹7,208.41 crore, according to provisional BSE data.
Market breadth remained positive, with 2,680 advancing stocks against 1,547 declines on the BSE.
Investor wealth increased by ₹36,051 crore to ₹422.37 lakh crore.
On a weekly basis, the Sensex and Nifty declined 0.36% and 0.47%, respectively, marking their sixth consecutive week of losses in a holiday-truncated week.