Sensex surges 2,400 pts, Nifty tops 22,600 after posting worst day in four years as poll verdict anxiety eases

Benchmark equity indices Nifty50 and Sensex rebounded on Wednesday after posting their worst day in over four years in the previous session. This came amid a narrow win for Prime Minister Narendra Modi's alliance, which raised concerns about policy continuity.

The volatility remained high on Dalal Street with the benchmark indices gyrating between gains and losses.

The BSE Sensex was trading over 2,400 points higher at 74,478 while its NSE counterpart Nifty topped 22,600 points as it gained 750 points. Both indices were up 3%.

According to the country's election commission, Bharatiya Janata Party (BJP) won 240 seats, falling short of the 272 seats needed for a simple majority in the 543-member lower house of parliament.

NSE Nifty 50 and S&P BSE Sensex closed nearly 6% lower each on Tuesday as voting trends indicated that BJP would have to depend on at least three regional allies to form the government.

From the Sensex pack, HUL, Nestle India, HCL Tech, Asian Paints, Kotak Mahindra Bank, and ITC opened higher, while Power Grid, L&T, NTPC, SBI, and Bharti Airtel opened lower.

On the sectoral front, Nifty FMCG surged 3%, led by HUL, Marico, and Dabur India. Nifty Auto, IT, Media, Pharma, and Healthcare also opened over 1% higher each.

Meanwhile, Adani Group stocks remained under pressure, falling as much as 12% in early trade.

Experts View
"The market will take some time to absorb the unexpected election results. Stability will return to the market soon but volatility will continue till there is clarity on the cabinet and the key portfolios," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"One positive of the sharp market correction is that the excessive valuations have moderated a bit and this will facilitate institutional buying once clarity emerges on the formation and composition of the cabinet," Vijayakumar said.

Deven Mehata, Research Analyst at Choice Broking, said, "Nifty can find support at 21,800 followed by 21,700 and 21,500. On the higher side, 22,000 can be an immediate resistance, followed by 22,150 and 22,200."

Asian Markets
Asian stocks rose on Wednesday, while the dollar was steady as a softening U.S. labour market firmed up bets of an interest rate cut in September from the Federal Reserve ahead of a crucial payrolls report this week.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.24%, while the Nikkei fell 1% as the Japanese yen flirted with two-week highs. China stocks were mixed, with the blue-chip CSI300 index little changed in early trading, while Hong Kong's Hang Seng index rose 1%.

FII/DII Tracker
Foreign institutional investors (FIIs) sold a record 12,436 crore worth of Indian shares on Tuesday, provisional data from the National Stock Exchange showed on Tuesday. Meanwhile, domestic institutional investors also sold equities worth Rs 3,219 crore on the same day.

Oil Slips
Oil prices extended losses slightly from the previous session in early Asian trading on Wednesday after an industry report showed builds in U.S. crude and fuel stockpiles, adding to concerns around demand growth.

Brent crude futures fell 14 cents, or 0.2%, to $77.38 a barrel. U.S. West Texas Intermediate crude futures fell 18 cents, or 0.3%, to $73.07 a barrel.

Both contracts fell nearly a dollar in Tuesday's session and around $3 a barrel on Monday, under pressure after the OPEC+ group detailed plans to increase supply from October onwards despite recent signs of weakening demand growth.

Currency Watch
The Indian rupee rose 7 paise to 83.44 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rose 0.09% to 104.2 level.

(With inputs from agencies)