Markets in green: Sensex rises 1,000 pts from day's low, Nifty near 25,250; 7 factors behind sharp recovery

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

The benchmark equity indices Sensex and Nifty recovered early losses by noon on Wednesday amid value buying after a sharp sell-off in initial trade, though volatility persisted.

In early trade, the Sensex declined 1,056.02 points, or 1.28 percent to an intraday low of 81,124.45. The broader Nifty fell 312.7 points, or 1.23 percent to 24,919.80, slipping below the 25,000 mark for the first time in over four months.

However, by around 12.45 pm, equities pared losses as buying emerged at lower levels. The Sensex recovered nearly 1,000 points from the day’s low to trade at 82,171.77, while the Nifty reclaimed the 25,200 level at 25,232.95, up 0.45 points.

ETERNAL, Power Grid Corporation of India and Grasim Industries were among the top gainers in the Nifty50 pack, rising up to 2 percent, while Trent and Bharat Electronics were among the major laggards, declining up to 3 percent.

Factors behind the recovery

1) Value buying: Buying interest was seen after markets extended the previous session’s sharp decline in early trade. On Tuesday, the Sensex and Nifty had fallen about 1.3 percent and 1.4 percent, respectively — their steepest single-day percentage drop in over eight months — and settled at their lowest closing levels in more than three months.

2) Bank Nifty pares losses: The Bank Nifty index recovered over 300 points from its intraday low after witnessing a near 1,000-point fall earlier in the session. Despite the rebound, all constituents were trading in the red, with ICICI Bank and AU Small Finance Bank leading losses, down over 2 percent each. At 11.25 am, the index was trading 1.4 percent lower at 58,576.

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3) Wall Street futures higher: US equity futures traded higher after steep losses on Wall Street overnight, offering some support to domestic equities. The S&P 500 futures rose 0.3 percent, while Dow Jones Industrial Average futures gained 0.2 percent.

4) Crude oil slips: Brent crude, the global oil benchmark, declined 1.11 percent to USD 64.19 per barrel. Lower crude prices are generally supportive for India, a major oil importer, as they help contain inflationary pressures and reduce the country’s import bill.

5) Recovery in IT shares: Nifty IT index also recovered from its early-day losses amid value buying. The index recovered about 500 points from the day's low. TCS and Wipro rose up to 1 percent.

6) Recovery in broader markets: Broader markets also showed signs of recovery. The Nifty Midcap 100 and Nifty Smallcap 100 indices, which had declined by more than 2 percent intraday, pared a portion of their losses and were trading down by around 0.5 percent.

7) India VIX eases from highs: The volatility index, India VIX, which had surged nearly 10 percent in early trade, moderated from its highs and was last quoted at 13.68, still up 7.48 percent.

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