Sensex Recovers 300 Points from Day's Low, Nifty Nears 24,450: Factors Contribute to Market Reversal

Market Rebound: Sensex and Nifty Recover Losses Amid Value Buying

The benchmark equity indices Sensex and Nifty recovered some of their losses on Wednesday, following a sharp decline in early trade. The markets had earlier seen a three-day rally before the decline.

Current Market Status

At around noon, the markets pared some of the losses to trade at 78,687.08, still down 586.25 points or 0.74 percent, while the Nifty was at 24,428.20, down 148.40 points or 0.6 percent.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Key Factors Behind Market Paring Losses

Value buying was observed after the initial sharp decline. In early trade, the Sensex had declined 831.03 points or 1.04 percent to a low of 78,442.30, while the broader Nifty declined to 24,352.90, down 223.7 points or 0.91 percent. Bank shares also saw significant buying interest, with the Bank Nifty moving.

The indefinite ceasefire announced by U.S. President Donald Trump on Tuesday, which would allow for further peace talks, also contributed to the market's recovery. However, it is unclear whether Iran or Israel would agree to the ceasefire.

Technical Support

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The markets seem to be taking a strong support at the 24,350 level. In today's trade, the broader Nifty declined to 24,352 level, and shortly bounced back, with buying emerging at this strong technical support level.

According to Osho Krishan, Chief Manager - Technical & Derivative Research at Angle One, the support zone has shifted higher to 24,350, followed by the 24,260-24,220 range, marked by the confluence of the 50 DEMA and the 50% retracement level, which is likely to provide a cushion against near-term declines.

Shrikant Chouhan, Head Equity Research at Kotak Securities, added that the market could retest the 24,350-24,300 / 78,700-78,500 levels. A close below the level of 24,300 could be negative for the market.

Market Comparison