Sensex Posts 850-Point Gain from Intraday Peak, Yet Remains Down 1% Amid Ongoing Market Volatility
Indian Stock Market Partially Recovers Amid Value Buying and Stronger Rupee
On April 2, the benchmark indices Sensex and Nifty staged a partial recovery after experiencing significant losses earlier in the day. The recovery can be attributed to value buying and a stronger Indian rupee, which posted its biggest gain in over 12 years.
In the afternoon trade, the Sensex was trading 1.1% lower, down 720.34 points from its opening value of 72,413.98. The Nifty also experienced a decline of 0.95%, down 216.05 points from its opening value of 22,463.35. However, the indices managed to trim their losses, with the Sensex climbing 850 points from its day's low and the Nifty reclaiming the 22,450-mark.
Market Factors Behind the Recovery
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Several factors contributed to the market's partial recovery. One key factor was value buying, which emerged after the markets fell over 2% earlier in the day. The Indian rupee also played a significant role, posting its biggest gain in more than 12 years due to intensified efforts by authorities to curb speculation against a weaker exchange rate.
| Market Index | Opening Value | Decline | Trading Status |
|---|---|---|---|
| Sensex | 72,413.98 | -0.98% | 1.1% lower |
| Nifty | 22,463.35 | -0.95% | 1.1% lower |
The rupee advanced as much as 1.8% to 93.1413 per dollar on Thursday, the most since September 2013. This gain came despite broad weakness across most regional currencies, which was partly attributed to US President Donald Trump's primetime address offering no clear timeline for an exit from the Iran war.
The Reserve Bank of India (RBI) implemented measures to curb speculation by prohibiting authorized dealers from offering certain non-deliverable contracts involving the rupee to resident or non-resident users. However, banks can still offer deliverable FX contracts for hedging purposes.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Technical Analysis
Analysts believe that as long as the Nifty stays above 22,220, investors can go long, indicating a potential for further recovery in the market.
Investor Takeaway
Markets may experience volatility due to ongoing market conditions.
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