Mumbai: Indian markets rebounded on Wednesday after the previous day's sell-off as easing crude oil prices, a recovery in South Korean equities and a rebound in IT stocks improved sentiment. The onset of the monsoon also supported investor mood.
The NSE Nifty rose 197.55 points, or 0.8%, to close at 24,021.65, while the BSE Sensex gained 790.54 points, or 1.04%, to end at 76,991.22.
Gains were led by index heavyweights in banking, IT and oil marketing companies, said Rajesh Palviya, head of research at Axis Direct. "Sentiment was also supported by expectations that discounted Iranian crude could be sold to India, which would benefit the economy," he said.
He said falling crude oil prices have eased inflation concerns, while monsoon progress and a moderation in foreign selling have provided relief.
Oil extended losses on Wednesday as concerns over potential supply disruptions in the Strait of Hormuz eased. Brent crude fell 4% to $74.02 per barrel, its lowest level since February 28 when the US launched its attack on Iran.
The Nifty IT index rose 2.05%. The Bank Nifty gained 1.7% after RBI Governor Sanjay Malhotra said in an ET Now interview that the central bank is yet to consider interest rate hikes.
India Volatility Index or VIX, the street's fear gauge, fell 4% to 13.4, tracking the market rebound
Gains in the broader markets were modest, with the Nifty Midcap 150 rising 0.1% and the Smallcap 250 gaining 0.2%. Of the 4,430 stocks traded on the BSE, 2,168 advanced and 2,101 declined.
Technically, the Nifty bounced from support around 23,800 but may face resistance in the 24,200-24,300 range over the next few weeks in the absence of fresh triggers, Palviya said.
"Since FIIs remain net sellers in India, domestic investors are also using rallies to book profits, which could limit further upside," he added. Foreign portfolio investors sold shares worth ₹1,843 crore during the session, while domestic institutional investors bought shares worth ₹3,637 crore.
