The Indian stock markets have recovered after falling for three consecutive days in a row.
Sensex and Nifty were higher, Sensex jumping in the first session of September and Nifty rising more than 200 points and near 24,000 level.
The stock markets were helped by a revival of financial and banking shares.
The BSE Sensex rose 207.31 points or 0.27 percent to 76,777.66 and the Nifty 50 rose 54 points or 0.23 percent to 23,968.45 in early trade on Thursday.
There was a weak session on Wednesday, when the Sensex lost 373.93 points and the Nifty was down 141.35 points.
Financial stocks were among the best performers during the early recovery. Bank indices, private lenders and state-owned banks rose by about 1 percent each and banks gained about 1.03% each.
State Bank of India and Axis Bank rose almost 1.03% each, while ICICI Bank was up about 0.95%. Adani Ports was another big early gainer and climbed around 1.30%.
The market overall showed signs of improvement. Small-cap stocks rose around 0.9 percent and mid-cap stocks rose about 0.2 percent in morning trading.
In all, nine of the 16 big sectors were higher, suggesting that buying interest was not restricted to a few stocks.
Liquidity conditions also remained an important factor for the financial sector. Banks collected over $60 billion in deposits from non-resident Indians within the final 10 days of the Reserve Bank of India’s swap scheme.
Total flows were $136 billion, beating expectations of $100 billion. The additional liquidity might help to lower interest rates and help non-banking financial companies and smaller private banks, Jefferies said.
Global market signals helped support Indian stock market signals also helped Indian equities to some extent.
Asian shares rose at the start of the week, while US markets also continued to higher levels, as well and stocks in the US markets ended the previous session in positive territory.
Investors were also looking for interest rates and future interest rate trends in US Treasury yields and economic data in the US to be key indicators of the direction of interest rates and American economic growth prospects for the future of interest rates.
But the recovery was under pressure from high crude oil prices and geopolitical tensions in the Middle East.
Brent crude was at $95 per barrel, and India’s import costs and inflation were on the agenda. Rising oil prices also had hurt Indian stocks during the previous sessions.
The 24,000 mark is still a key level for the Nifty. The market will be watching how far above it this morning (the index slipped below it during Wednesday’s session). A sustained recovery will help sentiment and selling pressure may keep volatility elevated.
And for now Thursday’s opening signals there is no short-term weakness to buy into after the recent pull back.
Investors will continue tracking banking stocks, crude oil prices, global bond yields and geopolitical developments, so the market is searching for a sustained recovery.
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