sensex-gains-152-pts-in-volatile-session

Mumbai: Benchmark equity indices ended marginally higher after a highly volatile trading session on Wednesday, with investors reacting to the Reserve Bank of India's decision to keep interest rates unchanged for the fourth consecutive monetary policy meeting. Strong buying in banking, automobile and capital goods stocks during the closing hours helped the markets recover from steep intraday losses.

The 30-share BSE Sensex advanced 152.05 points, or 0.19 per cent, to close at 78,581, with 17 constituent stocks ending in the green, 12 declining and one remaining unchanged. The benchmark opened on a firm note and touched an intraday high of 79,055.38 during the first half of the session. However, profit booking and late-session selling pressure dragged the index into negative territory, where it slipped to a day's low of 78,285.74, down nearly 770 points from the day's peak. A sharp recovery in heavyweight banking and auto counters during the final hour enabled the Sensex to finish with modest gains.

The broader NSE Nifty also ended slightly higher, gaining 9.75 points, or 0.04 per cent, to settle at 24,624.65. During the day, the benchmark touched a high of 24,677.60 and a low of 24,497.95, reflecting heightened volatility.

Market participants continued to grapple with sharp fluctuations in benchmark indices following the introduction of the Closing Auction Session (CAS) mechanism in the equity cash segment earlier this week. The new auction-based system, implemented from Monday for stocks with futures and options (F&O) contracts, aims to make the price discovery process at market close more transparent and efficient. However, traders said the new mechanism has led to significant divergence between intraday movements and final closing prices over the past few sessions.

Investor sentiment also remained focused on the outcome of the Reserve Bank of India's Monetary Policy Committee (MPC) meeting. As widely expected, the six-member panel, headed by RBI Governor Sanjay Malhotra, unanimously decided to keep the benchmark repo rate unchanged at 5.25 per cent while retaining the 'neutral' policy stance.

The central bank said it preferred to wait for greater clarity on the inflation outlook, particularly regarding the impact of elevated global energy prices amid geopolitical tensions in West Asia. At the same time, the RBI marginally revised its GDP growth forecast for the current financial year to 6.7 per cent, up from the earlier estimate of 6.6 per cent, citing resilient domestic demand, healthy manufacturing and services activity, and robust exports despite global uncertainties.

Commenting on the policy outcome, Vinod Nair, Head of Research at Geojit Investments Limited, said the RBI's decision reflected confidence in the domestic economy while remaining cautious about evolving global risks.

"The RBI's MPC has maintained the status quo while marginally upgrading FY27 GDP growth projections. Annual inflation estimates have also been lowered, indicating an optimistic outlook, although future policy actions will remain data-dependent," he said.

Among the Sensex constituents, UltraTech Cement, NTPC, State Bank of India, Mahindra & Mahindra, InterGlobe Aviation and Kotak Mahindra Bank emerged as the top gainers. On the other hand, Tata Consultancy Services, HCL Technologies, Reliance Industries and Bharat Electronics were among the major losers, limiting the market's overall gains.

Global crude oil prices continued to edge higher, with Brent crude rising 1.75 per cent to USD 80.75 per barrel, as investors monitored developments in the Middle East.

 

According to Ponmudi R, CEO of Enrich Money, Indian equity markets witnessed cautious trading as investors remained uncertain about the geopolitical situation and booked profits after the recent rally.

 

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"Although the Nifty opened above its pre-Closing Auction Session level, it failed to sustain early gains as selling pressure intensified through the day. Despite supportive global cues, the market maintained a cautious undertone amid uncertainty over the Middle East conflict," he said.

On the institutional front, Foreign Institutional Investors (FIIs) remained net buyers, purchasing equities worth Rs 2,446.47 crore on Tuesday, according to exchange data, providing some support to domestic markets.

Asian markets ended with strong gains. South Korea's KOSPI surged 3.76 per cent, while Japan's Nikkei 225 advanced 3.66 per cent. China's Shanghai Composite and Hong Kong's Hang Seng also closed in positive territory. European markets were trading higher during afternoon trade, while US markets had ended sharply higher overnight.

In the previous session, the Sensex had declined 210.08 points to settle at 78,428.95, while the Nifty had fallen 159.40 points to close at 24,614.90, making Wednesday's modest recovery a welcome relief for investors despite continued market volatility.