Indian Equity Benchmark Indices Recover Partially

On Thursday, the Sensex and Nifty equity benchmark indices partially recovered from steep early losses, driven by reports of safe passage for Indian oil shipments through the Strait of Hormuz and value buying in select shares.

Market Performance

The Sensex plummeted 992.53 points or 1.29% to an intraday low of 75,871.18 in early trade, while the Nifty declined 310.55 points or 1.3% to 23,556.30. However, the indices pared some losses as the session progressed, with the Sensex trading at 76,504.29, down 359.42 points or 0.47%, and the Nifty at 23,745.65, down 121.20 points or 0.51%.

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Key Drivers

1. Crude Oil Relief: Iran has reportedly allowed Indian tankers to pass through the Strait of Hormuz, providing significant relief for New Delhi amidst a worsening global energy crunch.
2. Value Buying: Value buying supported the recovery, with buying seen in index heavyweight Reliance Industries. The Sensex had tumbled 1,342.27 points or 1.72% to settle at 76,863.71 on Wednesday, while the Nifty had declined 394.75 points or 1.63% to close at 23,866.85.
3. Technical Factor: According to Anand James, Chief Market Strategist at Geojit Investments Limited, the steep fall in the previous session left room for recovery attempts. However, he noted that the Nifty needs to move above 23,990 to sustain the rebound, with a fall below 23,697 potentially exposing the index to the 23,550-23,370 zone.
4. Limited Fall in IT Stocks: Losses were capped by relatively stable IT shares, which tend to benefit from a weaker rupee due to a large share of their revenue coming from overseas markets. The Indian rupee depreciated 31 paise to 92.32 against the US dollar in early trade, pressured by foreign fund outflows, higher crude oil prices, and a stronger dollar amidst continuing tensions in West Asia.