Benchmark equity indices Sensex and Nifty closed higher on Wednesday, recovering from the sharp losses recorded in the previous session, as gains in banking stocks and softer-than-expected US inflation data lifted investor sentiment.
The latest inflation reading from the United States strengthened expectations that the Federal Reserve may adopt a less aggressive monetary policy stance in the coming months, providing support to global markets. However, rising tensions and escalating hostilities between the US and Iran kept investors cautious and led to profit-taking in the second half of the trading session, limiting the day's gains.
The 30-share BSE Sensex rose 130.49 points, or 0.17 per cent, to settle at 77,185.43. The index had gained significantly during the day, jumping 591.33 points, or 0.76 per cent, to touch an intraday high of 77,646.27.
The broader 50-share NSE Nifty also ended in positive territory, rising 26.45 points, or 0.11 per cent, to close at 24,078.50. Among the Sensex constituents, Eternal, UltraTech Cement, State Bank of India, Bajaj Finance, InterGlobe Aviation and Asian Paints were among the major gainers. Buying interest in banking and select heavyweight stocks helped the benchmark indices recover from the previous day's sell-off.
On the other hand, Power Grid, Larsen & Toubro, Tata Steel and Infosys were among the key laggards, restricting the overall market advance. Market sentiment was also supported by positive cues from several Asian markets. South Korea's Kospi surged 6.24 per cent, while Japan's Nikkei 225 and Hong Kong's Hang Seng also closed higher. However, China's Shanghai SSE Composite index ended the session lower.
European markets were trading in negative territory during the day, while US markets had closed higher on Tuesday. "Domestic equities exhibited resilience, with broader markets outperforming large caps amid positive Asian cues," Vinod Nair, Head of Research at Geojit Investments Ltd, said.
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He added that softer US inflation data had provided additional support to investor sentiment and helped markets recover from the previous session's decline.
In the commodities market, Brent crude, the global oil benchmark, rose 0.90 per cent to USD 85.50 per barrel. The rise in oil prices remained an area of concern for investors, particularly amid heightened geopolitical tensions.
Foreign Institutional Investors (FIIs) remained net sellers in the Indian equity market, offloading shares worth Rs 739.69 crore on Tuesday, according to exchange data.
The recovery on Wednesday came a day after the Sensex plunged 561.46 points, or 0.72 per cent, to close at 77,054.94. The Nifty had also declined 158.95 points, or 0.66 per cent, to settle at 24,052.05 in the previous session.
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