Sensex and Nifty see mild recovery amidst global markets’ hara-kiri

Stocks suffered massively on Friday as the UK voted to exit the European Union stoking widespread selling in the British Pound, Asian and European equities. Gold Futures surged to two-year highs on safe haven buying and the referendum claimed its first political victim: UK's Prime Minister said he would resign.

Britain's David Cameron favoured staying back in the economic block and the shock reaction saw major European indices dropping as much as 11 percent. Falls to the extent of 3-7 percent were seen in Asian indices. Indian markets plunged at the start with the Nifty dropping more than 5 percent. At one stage there wasn't a single gainer in the Nifty 51, the Sensex 30 and the universe of 178 futures in the derivatives market. However, short covering and buying at lower levels saw relatively lesser losses on these benchmarks.

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Some European indices bounced back sharply. The FTSE 100 was down 10 percent at start and later traded just 4.5 percent lower. Similar rebounds were seen across other major benchmarks. Some investors are pricing in a depreciated Pound boosting UK's exports and giving a fillip to British goods as they would be relatively cheaper compared with their European rivals.

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Locally, some traders took advantage of the dip and bought heavily into strong private sector lenders such as IndusInd Bank and Yes Bank. Gold traded at 31,222 rupees for a 10 gm lot, its highest since June 2014.

Meanwhile, the Nifty closed with losses of 189 points at 8,081 points. It recovered from an intra-day low of 7,928 points. Stocks that fell included Larsen & Toubro, Maruti and Yes Bank. They dropped between 2.2-7.1 percent. Sun Pharma added 0.5 percent on the Nifty on news of a buy back of shares at 950 rupees each. Bajaj Auto, Mahindra & Mahindra and GAIL rose modestly as well.

Tata Motors, State Bank and ICICI Bank took the first three slots of the list of top traded stocks by value. All three shares lost ground. Reliance Communications was present on the list of most active securities.

The Nifty 100, 200 and 500 indices plunged sharply in early deals, in line with the overall market, but recouped a large part of their losses. They ended with a red tick of nearly 2 percent each.

Major sectoral indices dropped between 1.3-3.8 percent at close.

The Sensex ended 604 points down at 26,398 points on the Bombay Stock Exchange, bouncing off a low of 25,920. Tata Motors, Maruti and Sun Pharma were the top traded shares on the index. Bajaj Auto was the top gainer along with GAIL and Asian Paints. The remaining 27 stocks ended lower, among them ONGC, Axis Bank and TCS.

Overall, the Sensex and the Nifty recovered about 2 percent from intra-day lows while the bounce was sharper on the Bank Nifty, which rose about 3 percent from its lowest point of the day.

Overall, the bears may have retained control of Dalal Street but the story of the day is the sharp recovery in major indices from intra-day lows. Even though the Advance-Decline Ratio in the wider stood at 1/4, its far better than the 1/12 in morning trade.

Auto ancillary stocks figured on the on the list of volume buzzers on the National Stock Exchange. Hence, Omax Autos, Alicon Castalloys and Mahindra CIE Automotive saw heavy volumes.

Gold jewellery seller Titan Company was among the very few stocks hit fresh highs in the first half hour of trade on the National Stock Exchange.

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