Indian equity shares rose over 1 per cent on Wednesday in a volatile session, led by gains in financial stocks after soft inflation and industrial output data stoked the hopes of an interest rate cut.
Gains were also supported by buying related to inclusion of some shares in MSCI India.
Domestic sentiment was also buoyed by fresh Cabinet approvals and positive global cues.
Brokers said buying activity emerged on positive economic data, with retail inflation easing to a 4-month low of 4.87 per cent in April, boosting hopes of a rate cut by the Reserve Bank in its policy review next month.
This kind of intense intra day volatility highlights the support in the 7,950 and 8,100 zone
— lokeshwarri sk (@lokeshwarri)
The 30-share BSE index Sensex surged 373.62 points or 1.39 per cent to end at 27,251.10 and the 50-share NSE index Nifty moved up by 108.50 points or 1.34 per cent at 8,235.45.
Barring realty, all other BSE sectoral indices ended in the green. Among them, banking index gained the most by 2.64 per cent, followed by capital goods 1.81 per cent, auto 1.72 per cent and power 1.29 per cent, while realty index was down 0.34 per cent.
Top five Sensex gainers were Axis Bank 4.95%, GAIL 3.08%, ICICI Bank 2.88%, SBIN 2.52% and M&M 2.48%, while the major losers were Hindalco 2.91%, NTPC 2.47%, Bharti Airtel 2.3%, Coal India 0.32% and VEDL 0.23%.
India VIX, a gauge of expected volatility in Indian shares, surprisingly rose alongside shares, to as high as 21.4, its highest since February 25, amid worries on key land, tax reforms and retrospective taxation of foreign investors.
Among those included in MSCI India index, Bharat Forge rose 1.8 per cent and Shree Cement ended 8.7 per cent higher.
Early trade
The 30-share barometer recovered sharply by 340.45 points or 1.27 per cent to 27,217.93 with all sectoral indices led by auto, healthcare and banking trading in the positive terrain with gains up to 1.8 per cent.
The gauge had plunged 629.82 points in yesterday’s trade on concerns that key reforms Bills may get delayed.
Similarly, the National Stock Exchange index Nifty recaptured the 8,200 level by recovering 114 points or 1.4 per cent to 8,240.95.
Mid-session trade
The market pared early gains with the BSE Sensex and NSE Nifty down steeply from the morning highs after about three hours of trading this morning.
The NSE Nifty, which touched a high of 8,245.95, was trading around 8,130 levels, a gain of 3.70 points but down by about 120 points from the morning high. The BSE Sensex, after touching a high of 27,299.80, was down by about 400 points at 26,879 level and was in positive territory, but barely.
Global markets
European shares steadied early on Wednesday, helped by some calm returning to bond markets and by strong results from France’s Vivendi and Britain’s SABMiller.
The pan-European FTSEurofirst 300 index was up 0.2 per cent at 1,578.41 points at 0713 GMT, mirroring a fall in yields across the main euro zone government bonds.
Asian shares firmed up on Wednesday, shrugging off weakness in Wall Street as investors bet that a batch of economic data from China due later in the day would bolster the case for more stimulus in the world's second-largest economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.5 per cent. Japan’s Nikkei stock index edged down slightly.