Domestic equity benchmark BSE Sensex rebounded by nearly 300 points in early trade on Wednesday, led by gains in index heavyweights RIL, HDFC and Infosys, amid positive cues from other global markets.
Easing inflation numbers, released after market hours on Tuesday, too helped the recovery in domestic market sentiment, traders said.
The 30-share index pared some opening gains to trade 122.51 points or 0.33 per cent higher at 37,080.67 at 0930 hours; and the broader Nifty too gained 35.30 points or 0.32 per cent to 10,961.15 in morning trade.
In the previous session on Tuesday, the 30-share index settled 623.75 points, or 1.66 per cent, lower at 36,958.16, while the NSE Nifty slumped 183.80 points, or 1.65 per cent, to 10,925.85.
Top gainers in the Sensex pack included Tata Steel, Vedanta, Yes Bank, Bajaj Finance, Hero MotoCorp, IndusInd Bank, Bajaj Auto, RIL and HDFC, rising up to 3.53 per cent.
While, Sun Pharma, PowerGrid, Maruti, HCL Tech, TCS and Kotak Bank fell up to 4.26 per cent.
Experts said, investor sentiment got a boost as easing retail inflation left room for the Reserve Bank to go for another round of rate cut in October.
Retail inflation eased marginally to 3.15 per cent in July on the back of softening fuel prices even as overall food prices moved up, showed government data on Tuesday.
Retail inflation was 3.18 per cent in June 2019, while it stood at 4.17 per cent in year-ago period (July 2018).
The overall food inflation, measured on Consumer Food Price Index (CFPI), moved up to 2.36 per cent during July from the revised 2.25 per cent print for June 2019, as per data released by the Central Statistics Office (CSO).
Meanwhile, foreign portfolio investors sold shares worth a net of Rs 638.28 crore on Tuesday, while domestic institutional investors purchased shares worth Rs 201.53 crore, provisional data showed.
Elsewhere in Asia, Hang Seng, Kospi, Shanghai Composite Index and Nikkei rebounded to trade higher in their respective late morning sessions, after US President Donald Trump delayed tariffs on electronic goods from China, assuaging investor concerns over US-China trade war.
Bourses on Wall Street too ended significantly higher on Tuesday.
Rupee rises 55 paise to 70.85 against US Dollar in early trade
The rupee rebounded from the six-month low and appreciated by 55 paise to 70.85 against the US dollar in early trade on Wednesday amid positive opening in domestic equity market and easing crude oil prices.
On Tuesday, the rupee had plunged 62 paise to close at a nearly six-month low of 71.40 against the US dollar in line with battered equities as global market turmoil and Argentine currency crash drove investors to safe havens.
At the interbank foreign exchange, the rupee opened at 71.00, then gained momentum and touched a high of 70.85, registering a rise of 55 paise over its previous close of 71.40.
The domestic unit pared some gains and was trading at 70.92 against the dollar at 0953 hrs.
Forex traders said US delaying new tariffs on Chinese electronics to December 15, also helped investor sentiments.
Market participants further said that positive opening in domestic equity market, encouraging macro data and easing crude oil prices supported the domestic unit, however, foreign fund outflows weighed on local currency.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 638.28 crore on Tuesday, according to provisional exchange data.
Consumer price index-based retail inflation eased marginally to 3.15 per cent in July on the back of softening fuel and light prices, even as overall food prices moved up, government data showed on Tuesday.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.03 per cent to 97.78.
Brent crude futures, the global oil benchmark, fell 1.04 per cent to trade at USD 60.66 per barrel.
Domestic bourses opened on a bullish note on Wednesday with benchmark indices Sensex trading 108.70 points higher at 37,066.86 and Nifty up 35.50 points at 10,961.35.
The 10-year government bond yield was at 6.58 per cent in morning trade.