Sigh of relief! Nifty snaps six-session losing streak, reclaims 10,600

The benchmark indices recovered on Wednesday, snapping six-session losing streak, after Asian markets rallied as a semblance of calm returned to Wall Street where major indices bounced into the black after days of deep losses.

At 9:18 am, the S&P BSE Sensex was trading at 34,563, up 367 points, while the broader Nifty50 was ruling at 10,607, up 109 points.

In the broader market, the BSE Midcap and the BSE Smallcap indices outperformed, rallying up to 2 per cent.

Market breadth, indicating the overall health of the market, was positive with six gainers against one loser. 

Among individual stocks, SBI (2.2 per cent), Tata Steel (2 per cent), Tata Motors (1.9 per cent) and Bharti Airtel (1.8 per cent) were the top gainers on Sensex. 

"Going by the weekly chart, the near-term trend remains down as long as Nifty maintains its position below 10,750-10,850. Due to yesterday’s volatility, the trading range for coming session has widened drastically. On the higher side, 10,594 – 10,679 would be seen as intraday hurdles; whereas, the immediate support zone is placed at 10,423-10,347," said brokerage Angel Broking in a technical note. 

RBI policy outcome due later today

The Reserve Bank of India, meeting amid a global market storm, is widely expected to keep its key rate on hold on Wednesday, but toughen its rhetoric as inflation has accelerated sharply, making an increasing number of analysts see a hike this year.

A Reuters poll showed 58 of 60 economists expect the repo rate to be kept at 6.00 per cent, the lowest since November 2010, and the reverse repo rate at 5.75 per cent. The other two predicted a 25 basis points hike.

But more analysts now believe tightening looms down the road after surging oil and food prices led India’s consumer inflation to a 17-month high of 5.21 per cent in December - well above the RBI’s 4 per cent target.

Global markets

the mood was one of relief. MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.7 per cent, recouping some of Tuesday’s 3.5 per cent fall. That had been its biggest daily drop since August 2015.

Chinese blue chips rallied 1.2 per cent and Japan’s Nikkei rebounded 3.1 per cent. The latter had slid 4.73 per cent on Tuesday for its steepest fall in 15 months.

Investors took their cue from a late rebound on Wall Street, though many had an anxious eye on E-Mini futures for the S&P 500 which were off 0.3 per cent in Asian trading.

The Dow had ended Tuesday up 2.33 per cent, while the S&P 500 added 1.74 per cent and the Nasdaq 2.13 per cent. The Dow carved out a 1,100-point trading range in all, a painful return of volatility to a market that until recently was marked by an absence of major shifts.

It was also a wild ride for Treasuries, with US 10-year yields diving as deep as 2.65 per cent before a fresh sell-off dragged them back up to 2.80 per cent - the sort of range seen very rarely.

While the pullback in bonds was a hint that risk appetite might be returning, it also had the potential to trigger another spasm of selling in stocks.

(With inputs from Reuters)