Mumbai, Feb 26 (IANS) Heightened geopolitical tensions in the sub-continent after India struck terrorist training camps in Pakistan dragged the domestic equity market lower on Tuesday.
However, the slide triggered a burst of value buying which was supported by easing US-China trade tension and soothing crude oil prices.
The benchmark Sensex shuttled over 450 points during a highly volatile trade session, as it fell steeply to hit an intra-day low of 35,714.16, following reports of strikes by the Indian Air Force (IAF) in Pakistan-administered Kashmir.
Subsequently, a late afternoon recovery was triggered due to a favorable movement in the crude oil prices and healthy gains in select stocks.
The S&P BSE Sensex closed 239.67 points or 0.66 per cent lower at 35,973.71, while the Nifty settled 44.80 points or 0.41 per cent down at 10,835.30.
“Although, we can see index closing in the red, the V-shaped recovery from lower levels was quite encouraging. In fact, there were plenty of individual stocks that had a remarkable day,” said Sameet Chavan, Chief Analyst – Technical and Derivatives, Angel Broking.
Among the top gainers was Tata Motors, which surged over 4 per cent, followed by Coal India, TCS, Tata Motors(DVR) and Axis Bank.
HCL Tech, HDFC, ICICI Bank, Infosys and State Bank of India closed lower.
“Despite fear of an escalation in geopolitical tensions, market recouped some losses and stayed range bound awaiting further developments in the wake of air strikes. Rupee, in line with equities weakened as investors don’t rule out the possibility of heightened tension,” said Vinod Nair, Head of Research, Geojit Financial Services.
“Market movement is likely to be cautious until further clarity over cross-border threat.”
According to Foreign Secretary Vijay K. Gokhale, in an intelligence-led pre-emptive operation in the early hours of Tuesday, India struck the biggest training camp of Jaish-e-Mohammad (JeM) in Balakot.
Gokhale added that the operation has eliminated a very large number of JeM terrorists, trainers, senior commanders and groups of jihadis.
This development is seen as an escalation of tension vis-a-vis already tense India-Pakistan ties in the backdrop of February 14 Pulwama terror attack that killed 40 CRPF troopers which may further spook investors in the sessions to come.