Sensex falls 332 pts, Nifty below 23,800 as markets recover some lost ground
- Sensex shed 332 points, closing at 78,450; Nifty fell 98 points to 23,775.
- Recovery from session lows of over 600-point drop on the Sensex.
- Losses trimmed in the final hour as select banking and IT stocks found buyers.
Markets open sharply lower, then claw back
Indian equity benchmarks opened deep in the red on Friday, extending the previous session's sell-off. The BSE Sensex tumbled over 600 points in early trade, while the NSE Nifty slipped below the 23,600 mark at one point.
But buying interest emerged in the final hour of trading, helping both indices trim a significant portion of the day's losses. The Sensex closed at 78,450, down 332 points. The Nifty ended at 23,775, a loss of 98 points.
Banking and IT stocks lead partial recovery
Heavyweights from the banking and information technology sectors were among the top contributors to the recovery. HDFC Bank, ICICI Bank, Infosys and TCS saw renewed buying in the last 90 minutes of trade.
Analysts attributed the bounce to short-covering ahead of the weekend. “Traders chose to square off bearish positions after the sharp fall, which provided a floor to the market,” a dealer at a domestic brokerage said.
Broader market under pressure
Despite the recovery in indices, the broader market remained weak. The BSE midcap index fell 0.6%, while the smallcap index lost 0.8%. Declining stocks outnumbered gainers on both exchanges.
Losses were led by metal and auto stocks, which faced selling pressure on concerns over slowing domestic demand and global growth uncertainty. Tata Steel, JSW Steel and Maruti Suzuki were among the worst-hit.
Global cues weigh on sentiment
Weakness in Asian markets added to the selling pressure. Japan's Nikkei, Hong Kong's Hang Seng and China's Shanghai Composite all traded lower during the Indian session, tracking overnight losses on Wall Street.
U.S. Federal Reserve comments hinting at a longer pause in rate cuts continue to dent risk appetite globally. Foreign portfolio investors have been net sellers in Indian equities for the past three sessions, data from the exchanges showed.
What to watch: Traders will monitor the next Fed policy meeting and the domestic quarterly earnings season for cues. The Nifty's ability to hold above 23,700 will be crucial for short-term direction.