Indian benchmark indices bounced back strongly on Wednesday, recovering a large part of the previous session’s losses as investors cheered softer US inflation data and renewed buying in banking and financial stocks.
During the session, the BSE Sensex surged over 500 points to trade above 77,500, while the NSE Nifty reclaimed the 24,200 mark. Financial heavyweights led the rally, with HDFC Bank, ICICI Bank, Axis Bank, Bajaj Finance and Shriram Finance emerging among the top gainers. On the losing side, ONGC, Tata Consumer Products, Coal India, NTPC and Power Grid traded lower as investors remained cautious about rising energy prices and global uncertainties.
The recovery followed Tuesday’s sharp sell-off, when the Sensex had fallen 561 points to close at 77,054.94, while the Nifty slipped 159 points to settle at 24,052, wiping out nearly ₹3 lakh crore in investor wealth. Rising crude oil prices, foreign institutional investor (FII) selling and escalating geopolitical tensions had triggered broad-based weakness across sectors.
Investor sentiment improved after US inflation came in lower than expected, raising hopes that the US Federal Reserve may slow the pace of future interest rate hikes. The easing inflation outlook supported global equities and encouraged investors to return to Indian markets, particularly large-cap financial stocks.
However, market participants remain watchful as tensions involving the US and Iran continue to fuel concerns over possible disruptions to global crude oil supplies. Higher oil prices could increase India’s import bill, add to inflationary pressures and impact corporate profitability if the rally in crude sustains.
Also Read: Tata Capital buys 88.6% stake in Yogloans