The NSE Nifty rose 285 points or 1.2%, to close at 24,765. The BSE Sensex gained 899 points, or 1.1%, to end at 80,015. Both indices fell by nearly 2.7% in the last two trading sessions of the shortened week, deepening a risk-off situation with military conflict in West Asia. Indian markets were closed on Tuesday due to Holi.
Elsewhere in Asia, Japan grew 1.9%, China grew 0.6%, Hong Kong 0.3%, South Korea 9.6% and Taiwan 2.6%.
“The sharp rally in the second half of the session was driven by expectations of a possible easing in geopolitical tensions,” said Amar Dev Singh, senior director of research at Angel One.
Technical indicators also sold off, which added to the day’s rebound. “The pullback was basically a textbook mean-retracement event driven by deep-sold technicals and violent short-covering pressure in derivatives,” said Bhaiya Shah, technical research analyst at Stoxbox.
Based on today’s price action, the index strengthened in the first half of the session before 2:15 pm, which led to cascading stop losses for intraday bearish bets, Shah said.
The Nifty India Volatility Index, or VIX — popularly known as the market’s fear gauge — cooled to 15.5% to 17.86 on Thursday after rising more than 50% earlier this week. The broader market indices outperformed the benchmarks on Thursday, with the Nifty Midcap 150 up 1.5% and the Nifty Smallcap 250 up 1.4%. Out of a total of 4,397 stocks on the BSE, 2,749 advanced and 1,515 declined.
FPIs sold shares worth ₹ 3,752.5 crore, while domestic institutional investors were buyers worth ₹ 5,153 crore.
Analysts are reluctant to conclude that the recovery is permanent. “The near-term outlook remains very volatile with a fundamental bias in sales growth,” Shah said. “Traders should not confuse a short squeeze with a new bull phase.”
He said traders should look at the resistance level of 24,850 in the Nifty, below which the index is likely to see a resumption of the current downtrend towards 24,300.
