Mumbai: Short-covering, along with supportive global cues and chances of Bharatiya Janata Party (BJP) retaining power in Madhya Pradesh buoyed the Indian stock exchanges on Tuesday after a volatile trade session, with the S&P BSE Sensex closing 190 points higher.
Initially, both the key indices — S&P BSE Sensex and NSE Nifty50 — had a gap-down opening and subsequently shed over 530 points and 150 points respectively as investors were spooked on the surprise resignation of RBI Governor Urjit Patel on Monday evening.
The sentiments had turned bearish as early election trends showed BJP in a neck and neck race with the Congress in the three out of five states including Madhya Pradesh.
However, the prospects of BJP retaining power in MP coupled with short covering and bargain buying by investors supported the gains on the indices.
Index-wise, the Sensex closed at 35,150.01, higher by 190.29 points or 0.54 per cent from the previous close of 34,959.72 points.
It opened at 34,584.13 and has so far touched an intra-day high of 35,207.33 and low of 34,426.29 points.
The Nifty50 ended the day’s trade at 10,549.15 points, higher by 60.70 points or 0.58 per cent.
“Indian markets rose after making a higher intra-day bottom from 10.40 a.m. onwards once there was clarity on the state election results. Market participants felt that the performance of the ruling alliance was better than expected in MP and Rajasthan,” HDFC Securities’ Retail Research Head Deepak Jasani told IANS.
“Positive global markets also aided sentiments. Short-covering along with absence of large selling led to recovery in the markets. PSU Banks saw buying in anticipation of a liberal RBI governor.”