Indian equity benchmarks ended with gains reversing sharp losses from earlier on Wednesday in an extremely volatile trading session, with the Sensex closing at a record high for the second straight day.
Domestic stocks rose sharply in the final hour of trading after flows that supported safe-haven assets reversed following Joe Biden's comment that the missile explosion in Poland might not have been shot from Russia.
After see-sawing between gains and losses for much of the day, the 30-share BSE Sensex index rose 107.73 points to close at a new record high of 61,980.72. That marks the second straight day of all-time high closing for the Sensex index.
Among the top gainers from the Sensex pack were Kotak Mahindra Bank, Hindustan Unilever, Dr. Reddy's, HDFC Bank, Bharti Airtel, HDFC, and Tata Consultancy Services.
Among the leading laggards were Bajaj Finance, Tata Steel, NTPC, Bajaj Finserv, UltraTech Cement, and IndusInd Bank.
The NSE Nifty-50 index edged 0.03 per cent higher to end at 18,409.65, reversing sharp losses from earlier in the session.
“Markets moved in a narrow range with bouts of sideways movement in intra-day trades, but selective buying in late trades helped key indices to end in positive territory. The lacklustre trend was visible across the Asian and European markets, which prompted local traders to trade cautiously," said Shrikant Chouhan, Head of Equity Research for Retail at Kotak Securities.
"After last week's spectacular rally, investors are in no hurry to lap up stocks despite some tailwinds in the domestic economy," he added.
Global stocks pared losses and the dollar fell on Wednesday after US President Joe Biden defused tensions over Poland blast.
The US President reassured G7 nations and NATO partners that a missile blast in Poland was actually caused by a Ukrainian defence missile, as opposed to a Russian missile.
That tempered the outflows in risk assets.
"The core belief is still this isn't going to cause an escalation. This is whatever it was, but it was not an attack on Poland and Biden's comments took the tension out of it," Societe Generale's Strategist Kit Juckes told Reuters.
US futures rose and pointed Wall Street stocks to open with small gains.
US stocks had ended in the green overnight after data confirmed inflation has likely peaked there, albeit with capped gains as markets monitored reports on the situation in Ukraine.
"(It) interrupted what is a far more constructive tone in markets over the last three, four days," Dwyfor Evans, Head of Asia Pacific Macro Strategy at State Street Global Markets in Hong Kong told Reuters, noting there has been optimism in financial markets that US inflation was cooling.
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