Late rally lifts Indian indices over 1% as traders trim bearish bets

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Mumbai: Key Indian indices advanced over 1% in a late rally on Monday, snapping their three-day losing run, as the absence of fresh escalation in the West Asian conflict prompted traders to cut their bearish bets in an oversold market.

NSE’s Nifty rose 257.7 points, or 1.1%, to close at 23,408.8, while the BSE Sensex gained 938.93 points, or 1.3%, to end at 75,502.85. Both indices had declined as much as 0.8% earlier in the day.

“Monday’s bounce looked purely technical in nature, in the absence of any news flow,” said Sham Chandak, head of institutional equities at Elios Financial Services. “The move was largely in Nifty and Bank Nifty, while broader market indices ended lower despite the recovery. This shows the move was largely on account of short covering in index derivatives.”

Elsewhere in Asia, Japan fell 0.1%, China declined 0.3%, and Taiwan dropped 0.2%, while Hong Kong rose 1.5% and South Korea gained 1.1%. Brent crude prices remained elevated above $100 but cooled to about $102 on Monday after rising above $106 earlier in the day, according to data from Investing.com.

Agencies

TRADERS TRIM BEARISH BETS Benchmarks bounce over 1% but broader indices end lower; A gap-up opening or follow-up buying could signal start of a technical pullback: Analysts

At home, FPIs net sold shares worth ₹9,365.5 crore, while domestic institutional investors bought shares worth ₹12,593 crore.

The Nifty rebounded after dropping below the 23,000-mark briefly on Monday, said Dharmesh Shah, head of technical research at ICICI Securities

“A gap-up opening or follow-up buying in the next session could signal the start of a technical pullback after the recent sharp fall. If weakness persists, the Nifty is likely to consolidate within the 22,700-24,000 band,” he said. NSE’s Volatility Index (VIX) – known as the market’s fear gauge – fell 4.6% to 21.6, indicating some relief among traders. The broader market remained weak, with the Nifty Midcap 150 and Nifty Smallcap 250 indices falling 0.4% each. Out of the total 4,537 stocks traded on BSE, 1,470 advanced and 2,910 declined.

“Market’s biggest worry at this point is potential disruption to the Gulf supply chain and the possibility of shortages in essentials such as natural gas,” Chandak said.

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