Strong Recovery Seen in the Market After Heavy Sell-Off

Indian equity indices recovered strongly from the previous session, recouping most of the losses from the worst market drop in four years. The S&P BSE Sensex finished down 2,303.1 points, or 3.2%, at 74,382, while the NSE Nifty 50 closed 688.95 points, or 3.15%, higher at 22,573.45. Nifty saw its biggest intraday increase since February 1, 2021, of up to 3.59% to 22,670.4, while Sensex gained 3.41% to 74,534.8 during the day. Heavy-weight stocks like HDFC Bank, Hindustan Unilever, Mahindra & Mahindra, Infosys, and ITC helped to gain in the Nifty 50. While Larsen & Toubro, State Bank Of India, Power Grid Corp., Bharat Petroleum, and Grasim Industries weighed on the index.

The broader market outperformed the benchmark index; The S&P BSE Mid-Cap index advanced by 4.41% and the S&P BSE Small-Cap index by 2.93%. On BSE, 2,557 stocks advanced, 1,224 stocks declined and 97 remained unchanged.

Among the sectoral indices, the Nifty Metal index (up 5.75%), the Nifty Private Bank index (up 5.13%) and the Nifty Auto index (up 4.70%) outperformed the Nifty 50 index. Meanwhile, the Nifty Oil & Gas index (up 2.18%), the Nifty IT index (up 2.39%) and the Nitty Really index (up 2.53%) underperformed the Nifty 50 index.

The sharp reversal in the Nifty 50 and closing above 22600 shows trend reversal. If the trend continues, it may see 22900 levels again.

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• Benchmark equity indices Nifty and Sensex rebounded on June 5 as two key allies pledged their support to form a new government with the BJP, giving investors confidence in political stability and continuity. Both frontline indices plunged around 6 percent on June 4, posting their worst day in over four years in the previous session as a narrow win for BJP-led NDA raised concerns about policy continuity. At close, the Sensex was up 2,303.19 points or 3.20% at 74,382.24, and the Nifty was up 735.80 points or 3.36% at 22,620.30.

• India’s bond market has garnered overseas inflows of about Rs 95,000 crore since the announcement of its inclusion in the JPMorgan Emerging Bond Market indices last September. Analysts believe that despite a short-term cooldown, inflow into the market will continue on positive economic fundamentals. The gilts will be included in the JPMorgan index on June 28, attracting around $25–50 billion in passive and active foreign inflows..

• Shares of Kotak Mahindra Bank rose over 4% today after the Reserve Bank of India cleared Zurich Insurance Company’s proposed buying of 70 percent stake in Kotak Mahindra General Insurance Company for Rs 5,560 crore.

Source: Moneycontrol, Economic Times,  Indian Express, Business Today, Livemint, Business Standard

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