Sensex, Nifty Recovers A Day After Worst Market Crash In Four Years: Midday Market Update

India's benchmark equity indices recovered on Wednesday, after facing the worst market crash in four years in the previous session, after Andhra Pradesh Chief Minister-Elect Chandrababu Naidu reiterated his commitment to the National Democratic Alliance.

At 12:03 p.m., the Nifty traded 426.70 points, or 1.95%, higher at 22,311.20, while the Sensex gained 1,331.66 points, or 1.85%, to trade at 73,410.71.

On Tuesday, the benchmarks had significantly fallen as the incumbant Prime Minister-led BJP secured lower-than-expected seats. Modi is set to lead a coalition government in his third term if the alliance manages to retain the unaligned Members of Parliament.

Market veterans expect volatility to continue in the coming sessions.

Mayuresh Joshi, head of research at Marketsmith India, attributed the jitteriness in the markets to uncertainty over the reform process and key decision-making by the new government. He advises investors to wait and watch for the next few days.

Aditya Arora, founder of Adlytick.in, noted that in the case of a coalition government, policymaking could change, and the focus could shift from capex to infrastructure. He advises investors to move to the FMCG sector due to its defensive nature.

Technically, the Nifty is expected to stay in the range of 21,500–22,200, according to Sudeep Shah, head of technical and derivatives research at SBICAP Securities. He noted that 21,250 is important support.

Shares of HDFC Bank Ltd., Hindustan Unilever Ltd., Mahindra & Mahindra Ltd., Infosys Ltd., and ITC Ltd., contributed the most to the Nifty.

While those of Larsen & Toubro Ltd., State Bank Of India, Power Grid Corp. Of India, Bharat Petroleum Corp. Ltd., and Grasim Industries weighed on the index.

Except Nifty PSU Bank and Nifty Realty, all sectoral indices rose. Nifty FMCG and Nifty Auto hit a lifetime high.

Broader markets also rose. S&P BSE Smallcap rose 1.74% and S&P BSE Midcap traded 2.61% higher. Nineteen out of 20 sectoral indices on the BSE rose. Only BSE Realty fell. BSE FMCG was the top gainer.

The market breadth was skewed in favour of buyers. Around 2,123 stocks rose, 1,504 declined, and 131 remained unchanged on the BSE.