Sensex, Nifty rebound after three sessions of losses, bank stocks lead gains

Benchmark equity indices Sensex and Nifty recovered in early trade on Thursday after falling for three consecutive sessions, helped by gains in major banking stocks and a positive trend across global markets.

The 30-share BSE Sensex rose 334.16 points, or 0.44 per cent, to 76,904.51, while the 50-share NSE Nifty gained 95.45 points to reach 24,009.90.

Bank stocks lead gains

Tata Steel, Adani Ports, Axis Bank, ICICI Bank, State Bank of India, HDFC Bank, Power Grid, Eternal, Larsen & Toubro, Bharti Airtel and UltraTech Cement were among the key Sensex gainers.

On the other hand, Tech Mahindra, HCL Technologies, Infosys, Tata Consultancy Services, Bajaj Finance, Titan, IndiGo, Sun Pharmaceuticals and ITC traded lower.

Record FCNR inflows support sentiment

Analysts said easing US bond yields and strong foreign-currency deposit inflows under a special RBI programme also helped improve market sentiment.

"The market sentiment is likely to look up on Thursday following the slight easing of the US bond yields. A big positive from the rupee perspective is the huge mobilisation of USD 136 billion under concessional swap facility.

"The USD 127 billion mobilised under the FCNR(B) scheme has come way above the consensus estimates. The implication of this from the market perspective is that the rupee will stabilise, imparting confidence to FIIs," said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.

The RBI said FCNR(B) deposits had brought in USD 127.226 billion as of August 31, marking a record inflow under the programme aimed at strengthening foreign-exchange liquidity.

Institutional buying continues

Foreign Institutional Investors bought equities worth Rs 6,688.37 crore on Wednesday, while Domestic Institutional Investors purchased shares worth Rs 2,812.98 crore, exchange data showed.

Vijayakumar said Wednesday's decline was notable because the Nifty fell 141 points despite institutional purchases of around Rs 9,500 crore.

"So, it is obvious that the brunt of the selling came from retail investors, proprietary traders and bears who used the market weakness to hammer the stocks down. This is likely to reverse on Thursday," he added.

Global markets provide support

Brent crude slipped 0.17 per cent to USD 95.47 a barrel. South Korea's Kospi, Shanghai's SSE Composite and Japan's Nikkei 225 traded higher, while Hong Kong's Hang Seng was lower. US markets ended with gains on Wednesday.

The Sensex had fallen 373.93 points to 76,570.35 on Wednesday, while the Nifty dropped 141.35 points to 23,914.45.