Indian benchmark equity indices began Wednesday’s trade session in the green. Both, BSE Sensex and Nifty 50 were up nearly 1 per cent, bouncing back after experiencing bloodbath, tumbling around 8 per cent on Tuesday (June 4).
The mayhem on Tuesday was massive as the Indian share market witnessed its worst fall in over four years.
At 9:17 am, Sensex was up 644 points or 0.89 per cent at at 72,723.13, while Nifty was at 22,070.90, up 186 points or 0.85 per cent.
In the pre-opening, Sensex was up by almost 950 points, or 1.32 per cent to 73,027.88. Nifty 50, meanwhile, was up 1.11 per cent to 22,128.35.
At 11:15 am, BSE Sensex was trading at 73,547.58, up 2.04 per cent or 1,468.53 points, while Nifty was up 2.12 per cent or 463.35 points at 22,347.85.
Reasons why Sensex, Nifty are trading up
On Tuesday, the Indian stock market tumbled after Lok Sabha election results showed Prime Minister Narendra Modi-led NDA securing lesser seats than those predicted in the exit polls.
However, market rebounded amidst a narrow victory for PM Modi’s alliance, which sparked concerns regarding policy consistency.
Sensex and Nifty were also up due to short-covering after a massive crash in the previous session.
Final result of Lok Sabha election 2024
According to the Election Commission of India (ECI), the BJP has won 240 seats, while Congress has won 99 seats.
The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) has won on 292 of 543 sears, while Congress-led INDI Alliance has sealed victory on 234 seats.
How Indian stock market will trade today
“Stability will return to the market soon, but volatility will continue till there is clarity on the Cabinet and the key portfolios,” VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.
“A sharp rebound in the market is unlikely in the near term, but sectoral preferences might change. Sectors like FMCG, healthcare and IT will find increasing preferences and the momentum plays will slowdown,” Vijayakumar further said.
“Investors can start nibbling at high quality largecaps in IT, financials, autos and capital goods,” recommended Vijayakumar."
“A huge selling was seen from Foreign institutional investors (FIIs) on June 4 as they sold Indian equities worth Rs 12,436.22 crore , while domestic institutional investors also sold equities worth Rs 3,218.98 crore on same day,” Deven Mehata, Research Analyst, Choice Broking, said.
“Traders should trade with strict stop loss as we can witness high volatility in the markets,” Mehata suggested.
Nifty can find support at 21,800 followed by 21,700 and 21,500. On the higher side, 22,000 can be an immediate resistance, followed by 22,150 and 22,200, Choice Broking said.
The charts of Bank Nifty indicate that it may get support at 46,700, followed by 46,500 and 46,300. If the index advances further, 47,300 would be the initial key resistance, followed by 47,500 and 47,700, Mehata said.
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