Markets bounce back after falling in early trade

Mumbai, Jun 1: Equity benchmark indices declined in initial trade on Thursday but soon bounced back to trade in the positive territory amid strong GDP data, continuous foreign fund inflows and a largely optimistic trend in Asian markets.

The 30-share BSE Sensex declined 77.28 points to 62,544.96 in early trade even after a positive beginning. The NSE Nifty dipped 15.35 points to 18,519.05.

However, later both the benchmark indices bounced back and were trading in the green.

The Sensex quoted 109.45 points higher at 62,731.69 and the Nifty traded with a gain of 36.75 points at 18,571.15.

From the Sensex pack, Bharti Airtel, Kotak Mahindra Bank, Maruti, Power Grid, Tata Motors, IndusInd Bank, NTPC, ITC and Bajaj Finance were the major laggards.

Asian Paints, Hindustan Unilever, Tech Mahindra, Tata Consultancy Services, Wipro and Axis Bank were among the gainers.

In Asian markets, Seoul quoted lower, while Tokyo, Shanghai and Hong Kong were trading in the green.

The US markets ended lower on Wednesday.

Firing on all cylinders, India continues to maintain its streak of world-beating economic growth after GDP for the March quarter beat all expectations with a 6.1 per cent expansion that helped push the annual growth rate to 7.2 per cent.

"A strong Q4 GDP data beating street expectations could bring in some cheers to investors and lift market sentiment," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Global oil benchmark Brent crude fell 1.20 per cent to USD 72.66 a barrel.

Foreign Institutional Investors (FIIs) continued to remain net buyers as they bought equities worth Rs 3,405.90 crore on Wednesday, according to exchange data.

In the US, veering away from a default crisis, the House approved a debt ceiling and budget cuts package late on Wednesday, as President Joe Biden and Speaker Kevin McCarthy assembled a bipartisan coalition of centrist Democrats and Republicans against fierce conservative blowback and progressive dissent.

Snapping its four-day rally, the Sensex fell 346.89 points or 0.55 per cent to settle at 62,622.24 on Wednesday. The Nifty declined 99.45 points or 0.53 per cent to end at 18,534.40.

"There are many positives going in favour of the ongoing rally. One, the US House of Representatives has passed the US debt ceiling bill indicating that the debt impasse will be resolved. Two, FPI investment in India continues with big investments during the last three days.

"Three, the Q4 FY23 and full year FY23 GDP growth figures coming at 6.1 per cent and 7.2 per cent have impressively beaten market expectations indicating that FPI optimism is justified. The 4 per cent decline in crude is another macro positive. These positives, particularly the GDP numbers, can impart resilience to the market," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.