Sensex, Nifty rebound in early trade after 3-day slide; bank stocks lead recovery

Indian equity benchmarks Sensex and Nifty rebounded in early trade after three sessions of losses, supported by gains in banking stocks, positive global cues and easing US bond yields. Record FCNR(B) inflows also boosted confidence in rupee stability and foreign investor sentiment

Mumbai: Benchmark equity indices Sensex and Nifty rebounded in early trade on Thursday after three sessions of losses, helped by buying in blue-chip bank stocks and a firm trend in global markets.

The 30-share BSE Sensex climbed 334.16 points, or 0.44 per cent, to 76,904.51 in morning trade. The 50-share NSE Nifty advanced 95.45 points to 24,009.90.

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Tata Steel, Adani Ports, Axis Bank, ICICI Bank, State Bank of India, HDFC Bank, Power Grid, Eternal, Larsen & Toubro, Bharti Airtel and UltraTech Cement were among the major gainers from the Sensex pack.

Tech Mahindra, HCL Technologies, Infosys, Tata Consultancy Services, Bajaj Finance, Titan, IndiGo, Sun Pharmaceuticals and ITC were among the laggards.

Analysts said market sentiment was also supported by easing US bond yields and record foreign-currency deposit inflows under a special RBI programme aimed at strengthening foreign-exchange liquidity.

“The market sentiment is likely to look up on Thursday following the slight easing of the US bond yields. A big positive from the rupee perspective is the huge mobilisation of USD 136 billion under concessional swap facility.

“The USD 127 billion mobilised under the FCNR(B) scheme has come way above the consensus estimates. The implication of this from the market perspective is that the rupee will stabilise, imparting confidence to FIIs,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.

India mobilised a record USD 127.23 billion through foreign-currency deposits under a special central-bank programme aimed at bolstering the country’s foreign-exchange liquidity, underscoring the growing role of its overseas diaspora as a buffer during periods of market stress.

Foreign Currency Non-Resident (Bank), or FCNR(B) deposits accounted for USD 127.226 billion in inflows as of August 31, the Reserve Bank of India said on Wednesday.

Meanwhile, Foreign Institutional Investors (FIIs) bought equities worth Rs 6,688.37 crore on Wednesday, while Domestic Institutional Investors (DIIs) also purchased shares worth Rs 2,812.98 crore, according to exchange data.

Vijayakumar noted that an interesting feature of Wednesday’s market decline is that the 141-point dip in Nifty happened despite Rs 9,500 crore of institutional buying, with FIIs buy figure of Rs 6,688 crore and DII buy figure of Rs 2,812 crore.

“So, it is obvious that the brunt of the selling came from retail investors, proprietary traders and bears who used the market weakness to hammer the stocks down. This is likely to reverse on Thursday,” he added.

Brent crude, the global oil benchmark, slipped 0.17 per cent at USD 95.47 a barrel.

In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite index, and Japan’s Nikkei 225 index traded higher, while Hong Kong’s Hang Seng index quoted lower.

US markets ended higher on Wednesday.

The 30-share BSE Sensex dropped 373.93 points to settle at 76,570.35 on Wednesday, while NSE Nifty slumped 141.35 points to end at 23,914.45, extending their losses to a third consecutive session.