Sensex recovers 250 points from day's low, Nifty near 23,900: 3 factors aiding bounce
- Sensex recovered over 250 points from intraday low, Nifty near 23,900
- Three factors: value buying at lower levels, recovery in banking stocks, positive global cues
- Market volatility seen amid mixed global signals and domestic profit-booking
Indian equity benchmarks staged a sharp recovery on Thursday, with the Sensex climbing more than 250 points from its intraday low. The Nifty inched closer to the 23,900 mark, offering some relief to traders after a weak start to the session.
The bounce came amid volatile trade as investors weighed mixed global cues and domestic profit-booking. At the time of writing, the Sensex was trading near 78,450, while the Nifty hovered around 23,885.
Value buying at lower levels
Traders attributed the recovery to value buying at lower levels after the indices slipped in early trade. The Nifty had opened weak but found support near the 23,750 zone, attracting bargain hunters.
Analysts noted that the market had seen a sharp run-up in recent sessions, making it prone to profit-booking. However, the underlying trend remained positive, with dips being bought into.
Banking stocks lead recovery
Banking and financial stocks played a key role in the bounce-back. Heavyweights such as HDFC Bank, ICICI Bank, and State Bank of India recovered from their early lows, lifting the overall sentiment.
The Nifty Bank index, which had slipped in early trade, rebounded and turned positive. The recovery in banking stocks added nearly 100 points to the Nifty's gain.
Analysts say the banking sector continues to attract interest due to strong earnings expectations and improving asset quality.
Global cues provide support
Positive cues from Asian markets also aided the recovery. Japan's Nikkei and Hong Kong's Hang Seng traded higher, boosting sentiment on Dalal Street.
Investors also tracked overnight gains on Wall Street, where the S&P 500 and Nasdaq ended higher on Wednesday. The positive global mood encouraged buying in risk assets.
However, concerns over rising crude oil prices and the US Federal Reserve's interest rate path kept gains in check. The market remains cautious ahead of key economic data due later this week.
Traders are now watching for the next trigger. The focus will be on the outcome of the US GDP data and any domestic policy announcements. For now, the market appears to be in a consolidation phase, with the Nifty likely to face resistance near the 24,000 mark.