Sharp recovery in markets: Sensex, Nifty erase day's losses as bank, auto shares rise

Sensex, Nifty decline on selling in IT shares. 

The equity benchmarks Sensex and Nifty erased early losses to trade flat amid high volatility on the weekly expiry day on Tuesday.

Strong buying in auto and bank shares outweighed losses in IT and realty stocks.

At around 12:30 p.m., Sensex was down 59.85 points or 0.073 percent to 82,100.12, while the Nifty declined to 25,200.35, down 2 points or 0.0079 percent.

Among major movers, auto shares provided support with Maruti Suzuki India, Bajaj Finance and Eicher Motors rising up to 2 percent. UltraTech Cement and Trent were among the top laggards, falling up to 2 per cent.

Sectorally, Nifty FMCG, IT, pharma, realty and consumer durables indices were among the worst hit, while auto, metal and PSU bank counters advanced. The Nifty Auto index gained nearly 1.5 percent on robust demand for two- and four-wheelers, led by Maruti, Eicher, Tata Motors, M&M, Hero MotoCorp and Bajaj Finance.

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IT stocks, which earn a significant portion of revenue from the US, fell 0.5 percent after a 3 percent drop in the previous session following the American government’s decision to raise H-1B visa fees.

"There is a bearish tone in the markets after the new H-1B visa fees as the move is likely to disrupt the Indian IT outsourcing model," said Hariprasad K, research analyst and founder of Livelong Wealth. Indians accounted for 71 percent of approved H-1B beneficiaries last year.

In the broader market, the Nifty Midcap 100 index slipped 0.35 percent. Adani Total Gas, Bharat Dynamics, Mphasis, Bandhan Bank and Coforge gained up to 4 per cent. The Nifty Smallcap 100 index declined 0.5 percent, with Godfrey Phillips India, Five-Star Business Finance, Aditya Birla Real Estate, Reliance Power and IFCI losing up to 3 per cent.

"The resumption of the near-term uptrend will depend on whether the Nifty holds the 25,200–25,000 range," said Anand James, Chief Market Strategist at Geojit Financial Services. "Early moves may retain a positive bias if above 25,238, but it would require a rise above the 25,278–25,335 region to attract momentum. The ideal rest point for the ongoing down move appears to be 24,880–24,800," he added.

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