Sensex, Nifty recover sharply in final hour: Here's what triggered the rally

Benchmark stock indices Sensex and Nifty pared intraday losses to close higher on Tuesday, driven by buying in the final hour amid a sharp drop in crude oil prices.

After moving in a range with a negative bias for most of the day, the 30-share BSE Sensex settled higher by 286.98 points, or 0.37 per cent, at 77,656.09, on monthly expiry day. As many as 24 of its constituents ended in gains, and six in losses. During the day, it hit a high of 77,666.39 and a low of 77,125.91.

The 50-share NSE Nifty also remained volatile before ending higher by 115.50 points, or 0.48 per cent, at 24,334.55 on fag-end buying.

Crude oil prices ease

Among the 30 Sensex firms, InterGlobe Aviation, Adani Ports, Infosys, Trent, Titan and State Bank of India were the major winners.

Eternal, HCL Tech, Power Grid and Bajaj Finserv were among the major laggards.

Brent crude, the global oil benchmark, declined 3 per cent to USD 89.32 per barrel.

"The much-anticipated US sanctions against Iran fell short of market expectations, causing crude oil prices and bond yields to moderate from their recent peaks. This relief in energy costs aided a moderately positive close today on the monthly expiry day," Vinod Nair, Head of Research, Geojit Investments Limited, said.

Indian equity markets ended modestly higher on Tuesday, recovering from intraday lows as a sharp retreat in energy prices improved sentiment and triggered short covering on the monthly derivatives expiry," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

The Nifty faced selling pressure early in the session and remained range-bound for much of the day before gaining momentum toward the close, he said. "The decline in crude oil prices provided the key catalyst, helping the benchmark erase its losses and finish marginally in positive territory," Ponmudi added.

Sectoral performance mixed

The BSE MidCap Select index was up 0.64 per cent, while SmallCap Select index ended marginally lower by 0.02 per cent.

Among sectoral indices, Telecommunication jumped the most 1.39 per cent, followed by Hospitals (1.30 per cent), PSU Bank (0.85 per cent), Consumer Durables (0.81 per cent), Services (0.73 per cent), Housing Finance (0.62 per cent) and Metal (0.43 per cent).

Private Banks index, Insurance and MidSmall Private Banks were the laggards.

"Indian equity benchmarks staged a sharp late-session recovery on Tuesday as expiry-day positioning and rollover activity gave way to strong buying in the closing auction window," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.

Global markets and FII activity

In Asian markets, South Korea's Kospi, Japan's Nikkei 225 and Shanghai's SSE Composite index ended higher, while Hong Kong's Hang Seng index settled marginally lower.

Markets in Europe were trading in positive territory. US markets ended mostly lower on Monday.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,181.66 crore on Monday, according to exchange data.

In the last session, the Sensex declined 171.72 points, or 0.22 per cent, to settle at 77,369.11. The Nifty slipped 32.95 points, or 0.14 per cent, to end at 24,219.05.