Sensex, Nifty rebound sharply to gain over 1% on bargain hunting

• Sensex gained 689 points while Nifty also closed 215 points higher on Wednesday.
• The session saw bargain hunting in metal, commodity and telecom stocks.
• Market sentiment is still muted despite the rebound due to uncertainties and FII selloff.
  

Equity benchmark indices Sensex and Nifty rebounded sharply by 1% on Wednesday after sliding for the past two sessions, propelled by bargain hunting in metal, commodity and telecom stocks.

Sensex fell by over 1,000 points and Nifty by 333 points on Tuesday. On Wednesday, Sensex traded through a patchy track in the opening session, and gradually gained ground and jumped 689.76 points, or 0.98%, to settle at 71,060. The broader NSE Nifty also closed 215.15 points or 1.01% higher at 21,453.

“After witnessing heavy profit-booking in recent sessions, investors resorted to short covering ahead of F&O expiry on Thursday which helped benchmark Sensex close above the crucial 71k mark. Helping positive sentiments were improving European stock markets on backdrop of negative US Treasury bond yields which were seen weighing on the US Dollar,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.

Among the Sensex firms, major winners included Tata Steel, rising 3.77%, followed by HCL Tech, which gained 3.62%. IndusInd Bank and PowerGrid closed with a gain of 3.6% and 3.34%, respectively. Other gainers were Tech Mahindra, Hindustan Unilever, Bajaj Finserv and Bharti Airtel, among others.

On the other hand, ICICI Bank, Axis Bank, Asian Paints, Bajaj Finance and TCS were the only laggards, sliding up to 2.94%. A total of 25 stocks of the 30-share benchmark settled in green, while 43 constituents of the NSE Nifty witnessed gains.

Meanwhile, Brent crude futures, the global oil benchmark, were trading higher by 0.58% to $80.01 per barrel on Wednesday.

'Sentiment is still muted'

The sentiment however is muted, say market experts, as foreign Institutional Investors (FIIs) turned net sellers in the capital markets on Tuesday. They offloaded shares worth ₹3,115.39 crore, according to exchange data.

"The market rebounded from yesterday's sell-off taking cues from global peers. The sentiment was reinforced by the PBOC's 0.5% cut in reserve ratio to boost growth and financial liquidity. However, overall sentiment is muted as concerns persist on FIIs selling due to premium valuations in India and below expectation Q3 earnings so far," said Vinod Nair, head of research, Geojit Financial Services.

Tapse also added that despite the rebound, one may see sharp gyrations in the market in the near to medium term. This is due to a lot of uncertainty surrounding the West Asia conflict, renewed inflation worries and delay in rate cuts from the US Fed.

(With inputs from PTI)