After seven consecutive trading sessions of declines, Indian equity markets ended higher on Thursday, August 20, as buying across sectors lifted both the Sensex and Nifty.
The BSE Sensex gained 628.04 points, or 0.82%, to close at 77,537.72. The NSE Nifty 50 rose 153.55 points, or 0.64%, to 24,231.85. During the session, the Nifty touched an intraday high of 24,265.15.
The recovery followed a positive trend in global markets, softer US bond yields and buying in IT and financial stocks. After some profit-taking in the initial part of the session, broader buying supported the benchmark indices. According to Reuters, 14 of the 16 major sectors ended higher.
The recovery in the global bond market also supported Indian equities. The US Treasury announced an increase in its buyback activity for long-term government bonds, which led to softer long-term yields and provided some support to risk assets. The improvement in global equity markets was also reflected in Indian equities.
Before Thursday's recovery, the Nifty had declined about 2.1% over seven consecutive sessions. On Wednesday, the index had closed at 24,078.30, while the Sensex had ended at 76,909.68.
IT and financial stocks were among the key contributors to Thursday's gains. According to Reuters, the Nifty IT index rose about 0.8%, while the financial sector index gained about 0.7%. Buying in banking and other financial stocks also supported the recovery.
The major Nifty gainers included Eternal, Kotak Mahindra Bank, Bajaj Finance, ITC and Shriram Finance. Hindalco Industries, Bharat Electronics, Tata Consumer, InterGlobe Aviation and Nestle India were among the stocks that remained under pressure.
Aditya Birla Capital gained about 3% after the company announced its entry into the gold loan business. Autoline Industries also advanced, with the stock rising as much as 5% after the company received a new business order from Tata Motors Passenger Vehicles.
Shares of Glenmark Pharmaceuticals rose about 3% after the company received approval from the US Food and Drug Administration for its nasal spray. Brigade Enterprises also remained in focus, with its shares gaining more than 6% after the company entered into a lease agreement with US-based HealthEdge for about 1.62 lakh square feet.
The gains extended beyond large-cap stocks. The midcap index rose about 0.4%, while the smallcap index ended about 0.7% higher.
According to Reuters, foreign capital flows, elevated crude oil prices and geopolitical risks remained areas of market caution. Higher oil prices are a key risk for Indian markets because they can increase import costs and put pressure on inflation.
The Indian rupee also recovered marginally alongside the equity market. The rupee closed at 95.7050 against the US dollar, compared with 95.7525 in the previous session.
During the session, the rupee strengthened to 95.56 per dollar at the opening level. Weakness in the US dollar and easing in the US bond market provided some support to the Indian currency.
