Indian Stock Markets Stage Dramatic Turnaround on Thursday
Benchmark equity indices, the BSE Sensex and NSE Nifty, executed a remarkable recovery on Thursday, clawing back from significant intraday declines to close in positive territory. This resurgence was fueled by strategic value buying in key sectors like information technology and banking, coupled with a robust rebound in the Indian rupee following regulatory interventions by the Reserve Bank of India.
Sharp Intraday Swings and Closing Figures
The 30-share BSE Sensex concluded the trading session at 73,319.55, marking a gain of 185.23 points or 0.25%. This closing figure masks the volatility witnessed earlier, as the index had plummeted by 1,588 points during early trade to touch a low of 71,545.81. From this trough, the Sensex orchestrated an impressive rally, surging over 2,000 points to reach an intraday peak of 73,568.54 in late trading hours.
Similarly, the NSE Nifty recovered from substantial losses to settle at 22,713.10, up by 33.70 points or 0.15%. Earlier in the session, the Nifty had dropped sharply by 496.85 points or 2.19%, before climbing to a high of 22,782.30, demonstrating the market's resilience.
Rupee Rebound and RBI Measures Provide Support
Market sentiment received a significant boost from a sharp recovery in the Indian rupee, which strengthened notably against the US dollar. The currency appreciated by 188 paise, briefly touching the 92 level before settling more than 150 paise higher. This recovery was largely attributed to regulatory actions by the Reserve Bank of India aimed at stabilizing the currency, including capping banks' net open rupee positions and restricting non-deliverable forward offerings to corporates.
Vinod Nair, Head of Research at Geojit Investments Ltd, commented on the situation, stating, "The RBI's twin regulatory actions—though disruptive to banking operations in the near term—achieved their intended effect, mechanically forcing dollar unwinding and engineering a meaningful rupee recovery."
Sectoral Performance and Stock Movements
Bargain hunting in IT stocks was a primary driver of the market's upward movement. HCL Technologies and Tech Mahindra emerged as top performers, each rising nearly 3%. Other notable gainers on the Nifty50 included Infosys, Wipro, Tata Consumer, TCS, Hindalco, Bajaj Finance, HDFC Bank, and Maruti Suzuki.
Conversely, several stocks faced selling pressure. On the Nifty50, top losers included Eicher Motors, Asian Paints, Eternal, Sun Pharma, Bajaj Auto, Max Healthcare, NTPC, Reliance Industries, HDFC Life, and Grasim Industries. The BSE Sensex mirrored similar trends, with Asian Paints, Eternal, Sun Pharma, NTPC, and RIL among the major decliners.
Global Context and Market Influences
The initial market weakness was triggered by global cues, particularly renewed geopolitical tensions. US President Donald Trump's threats to strike Iran "extremely hard" in a national address erased optimism from the previous session, leading to broad-based selling across Asian markets. This sentiment was reflected in crude oil prices, with Brent crude surging over 7% to trade at USD 108.52 per barrel.
Asian markets ended lower, with South Korea's Kospi falling 4.47%, Japan's Nikkei 225 declining 2.40%, Shanghai's SSE Composite slipping 0.74%, and Hong Kong's Hang Seng losing 0.70%. European markets also traded in negative territory, with Germany's DAX down 1.71%, Paris' CAC 40 falling 0.98%, and London's FTSE 100 slipping 0.12%.
Institutional Activity and Previous Session Recap
Institutional flows showed contrasting patterns. Foreign Institutional Investors sold equities worth Rs 8,331.15 crore on Wednesday, while Domestic Institutional Investors bought stocks worth Rs 7,171.80 crore, indicating domestic support amidst foreign outflows.
This recovery follows a strong performance in the previous session, where the Sensex had surged 1,186.77 points to close at 73,134.32, and the Nifty climbed 348 points to settle at 22,679.40, highlighting the ongoing volatility and resilience in Indian equity markets.
