Sensex, Nifty Attempt To Stabilise After Few Days Of Wild Crash

Indian equity benchmarks attempted to stabilise on Tuesday, halting a four-day losing streak, after a wild few sessions of stumbling global stocks and a soaring dollar as investors paused for breath after sell-everything sentiment in recent days.

The 30-share BSE Sensex index gained 461.82 points to 57, 607.04 in early trade, and the Nifty advanced 144.15 points to 17,160.45, opening in the green after four sessions of deep losses, reflecting a more positive mood in broader Asian bourses.

The Nifty FMCG index and the IT index gained about 1 per cent.

After Reuters reported that new regulations allowing producers marketing independence had resulted in the explorer receiving a better price for oil, shares of India’s Oil and Natural Gas Corp rose 2.6 per cent.

Reuters reported that the shares of Mahindra Logistics increased by 4.5 per cent after the company announced plans to acquire Rivigo’s B2B Express business for 2.25 billion rupees and sell its enterprise mobility business to its unit for 361.2 million rupees.

On Monday, though, both benchmarks crashed, similar to Friday.

The MSCI index of Asia-Pacific shares outside of Japan rose 0.7 per cent, the Japanese Nikkei was also up 0.7 per cent, and the S&P 500 futures pointed to a positive opening.

“Markets are likely to take a breather from the recent corrections and start Tuesday’s session on a higher note, tracking recovery in SGX Nifty and select Asian indices even as US markets in overnight trades continued the declining trend,” said Prashanth Tapse, Senior Vice President for Research at Mehta Equities.

“However, markets may continue to wobble intra-day amidst escalating risks of a global recession driven largely by aggressive monetary tightening around the world to suppress elevated inflation,” he added.

While Tuesday’s trading pattern in early Asia hours points to some respite from Monday’s bloodbath, uncertainty over supply disruptions caused by the Russia-Ukraine war, along with tightening monetary policy around the world that threatens economic downturns, still weigh on the outlook.

Indeed, investors remain jittery as markets have been further unnerved by a record plunge in British assets – the pound and gilts – in response to government spending plans.

That sentiment spilt over to US markets, deepening the bear market on Wall Street, with benchmark 10-year Treasury yields jumping by more than 20 basis points to a 12-year high and keeping the dollar well bid.

State Street Global Markets’ Macro Strategist, Yuting Shao, said uncertainty is rippling through the market and weighing on investor sentiment.

“We are already entering a bit of a slowing down when it comes to global recovery. And the continual tightening of central banks will, of course, bring more pain in terms of their domestic economic recovery,” she told Reuters.

As the pound fell to historic lows and commodities crumpled under the weight of a hulked-up dollar, the S&P 500 fell to its lowest level since December 2020, extending this month’s losses to almost 8 per cent.

Risk assets that continue to achieve pitiful milestones in the face of a concerted global increase in interest rates received no assistance from monetary policymakers in Europe or the US.

“Unfortunately, this is just a process that’s going to need to play out because the Fed is not going to stop, and the market has to price in accordingly,” Stephanie Lang, chief investment officer at Homrich Berg, told Bloomberg by phone.

“There’s still some downside because of the outlook that if we’re not in a recession, we will be in one soon.”