Sensex rebounds 750 pts from day's low, Nifty reclaims 23,800: 5 key reasons behind market paring losses

Stock market today news: Sensex, Nifty see value buying in trade. 

• Sensex and Nifty recovered after steep early losses on Thursday.
• Value buying and stable IT stocks helped limit market losses.

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The equity benchmark indices Sensex and Nifty recovered partially from steep early losses on Thursday, amid value buying in blue chip Reliance Industries.

The Sensex had dropped 992.53 points or 1.29 percent to hit an intraday low of 75,871.18 in early trade. The broader Nifty slipped 310.55 points or 1.3 percent to 23,556.30.

However, the indices pared some of the losses as the session progressed. By 1:45 pm, the Sensex was trading at 76,561.74, down 301.97 points or 0.39 percent. The Nifty was at 23,825.35, down 41.50 points or 0.17 percent.

Key reasons behind market rebound

1) Crude oil relief: In a significant relief for New Delhi amid a worsening global energy crunch, Iran has allowed tankers flying the Indian flag to pass through the Strait of Hormuz, according to a report by CNN-News18 citing sources.

However, an Iranian source denied allowing the Indian tankers to pass through, reported Reuters.

2) Value buying: Value buying also supported the recovery after the sharp fall in the previous session. The buying was also seen in index heavyweight Reliance Industries, which was up more than 1 percent. On Wednesday, the Sensex had tumbled 1,342.27 points or 1.72 percent to settle at 76,863.71. The Nifty had declined 394.75 points or 1.63 percent to close at 23,866.85.

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3) Technical factor: According to Anand James, Chief Market Strategist at Geojit Investments Limited, the steep fall in the previous session left room for recovery attempts. However, he said the Nifty needs to move above 23,990 to sustain the rebound. A fall below Monday’s reaction low of 23,697 could expose the index to the 23,550–23,370 zone.

4) Limited fall in IT stocks: Losses were also capped by relatively stable IT shares, which tend to benefit from a weaker rupee as a large share of their revenue comes from overseas markets in dollars. The Indian rupee depreciated 31 paise to 92.32 against the US dollar in early trade, pressured by foreign fund outflows, higher crude oil prices and a stronger dollar amid continuing tensions in West Asia.

5) Buying in electricity shares: Amid a gas shortage fears, electricity shares are gaining traction. Coal India and Power Grid were among the top gainers in the Nifty50 pack, rising up to 4 percent.

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