Indices plunge 2%, then ride rupee rebound to log gains

India’s benchmark indices bounced back from early losses on Thursday to close higher, with a rupee rebound triggering short covering ahead of an extended weekend. Financial markets will remain shut on Friday for Good Friday.
BSE Sensex closed 185 points, or 0.25%, higher at 73,319, while Nifty 50 rose 33 points, or 0.15%, to settle at 22,713. Earlier in the session, both indices had fallen as much as 2.2%.

“The extended weekend triggered short covering because traders were reluctant to carry positions amid geopolitical uncertainty and oversold conditions,” said Apurva Sheth, head of research at Samco Securities.


Sensex and Nifty declined 0.4% and 0.5%, respectively, in the truncated trading week, extending losses to the sixth straight week. The recovery on Friday contrasted with the weakness in global markets trend elsewhere after Donald Trump on Wednesday said the West Asia conflict will end soon and that the US forces will continue to hit Iran for the next two to three weeks, dashing hopes of a quick peace that had triggered a global market rally and a drop in oil prices. Brent crude on Thursday surged 8% to $109 a barrel.

China sank 1.6%, Hong Kong fell 0.7%, South Korea declined 4.5% and Taiwan dropped 1.8%.

At home, overseas investors were net sellers worth ₹9,931 on Thursday, while domestic institutions bought worth. ₹7,208. Nifty Midcap 150 dropped 0.3%, and Nifty Smallcap 250 fell 0.2%. Of the 4,387 stocks traded on BSE, 2,680 advanced and 1,547 declined.

India’s volatility index rose 2.03% to 25.52, reflecting continued uncertainty over near-term market direction. From a technical perspective, the market continues to form lower highs on daily charts, indicating a weak trend. “However, momentum indicators suggest a pullback could continue in the near term,” said Amol Athawale, VP technical research, at Kotak Securities.