Sensex and Nifty Rebound After Major Election Shake-up

Benchmark equity indices Sensex and Nifty made a strong comeback on Wednesday after a significant drop the previous day. The jump was propelled by value-buying at lower levels. Despite BJP's reduced majority, analysts expect continuity in the policy agenda with potential tweaks and measures to address rural stress.

Benchmark equity indices Sensex and Nifty experienced a robust rebound on Wednesday following a sharp decline in the previous trading session, driven by value-buying at lower levels.

After Tuesday's sharp decline, the 30-share BSE Sensex surged by 1,772.04 points to reach 73,851.09 during the afternoon trading hours. Meanwhile, the NSE Nifty climbed by 560.5 points to 22,445. Despite the BJP falling short of the majority mark in the Lok Sabha for the first time since 2014, a report from Motilal Oswal Research suggested that Modi's policy agenda is likely to continue with minor adjustments and populist measures to uplift rural sentiment.

Among the top gainers on the Sensex were Mahindra & Mahindra, Hindustan Unilever, Asian Paints, IndusInd Bank, Kotak Mahindra Bank, and Nestle, while companies like Larsen & Toubro, Power Grid, and State Bank of India struggled. V K Vijayakumar of Geojit Financial Services noted that market stability will return once there is clarity on the new cabinet and key portfolios.

Internationally, mixed trends were observed with gains in Seoul but losses in Tokyo, Shanghai, and Hong Kong. The U.S. markets ended positively. Brent crude saw a minor dip of 0.04 percent, settling at USD 77.49 per barrel. Foreign Institutional Investors (FIIs) sold equities worth Rs 12,436.22 crore on Tuesday, marking the worst trading day in four years for the markets.

The BSE Sensex plummeted by 4,389.73 points to a low of 72,079.05 on Tuesday, while the NSE Nifty fell sharply by 1,982.45 points to settle at 21,281.45 during the day, only to close at 21,884.50 with a decline of 1,379.40 points or 5.93 percent.