Closing Bell: Sensex recovers over 850 points from day's low; Nifty closes below 23,450 - Here's why markets rebounded

Indian equity benchmarks staged a sharp recovery from intraday lows on Wednesday but failed to end in positive territory amid volatile trade. The BSE Sensex settled at 74,346.17, down 303.67 points or 0.41 per cent. The index opened at 74,507.73 and slipped to an intraday low of 73,492.60.

From the day's low, the Sensex recovered 853.57 points before closing, highlighting strong buying support at lower levels. However, it still ended 303.67 points below the previous close of 74,649.84.

The NSE Nifty 50 closed at 23,405.60, down 77.95 points or 0.33 per cent. The index touched an intraday low of 23,151.50 after opening at 23,415.95.

The Nifty had fallen as much as 332.05 points from its previous close of 23,483.55 during the session. It later recovered 254.10 points from the day's low before settling near the day's high of 23,459.65.

What Triggered the Recovery in Nifty & Bank Nifty?

The stock market's sharp recovery from intraday lows on Wednesday was largely driven by strong technical support levels and buying in banking stocks, market expert Anil Singhvi said.

Singhvi said the Nifty rebounded after filling the gap created on April 7-8 and touched a crucial support zone around 23,150.

"The first reason behind the recovery is technical. Nifty completed the April 7-8 gap and turned exactly from the 23,150 level. Bank Nifty also bounced from its key support zone near 53,000," he said.

According to Singhvi, banking shares led the recovery and played a key role in pulling the broader market higher.

He also said market participants were tracking developments related to the Union Cabinet meeting. Discussions in the market suggested the government could consider amendments related to taxation provisions affecting foreign institutional investors (FIIs).

"There are discussions that some changes related to FII taxation may be considered. Any such move could help improve market sentiment," Singhvi said.

Key Levels To Watch

Singhvi said 23,150-23,125 remains a strong support zone for Nifty, while 53,125-53,275 is an important support range for Bank Nifty. He advised investors to consider buying if Nifty revisits the 23,150-23,075 zone, with a stop loss at 23,000.

For the upside, Singhvi said Nifty could move towards 23,550 and then 23,700, while Bank Nifty may target the 54,100-54,400 range.

Risk Remains Below Key Levels

Singhvi said the market outlook would remain positive if Nifty closes above 23,550 and Bank Nifty above 54,100. However, he cautioned that downside risk could increase if Nifty closes below 23,200 and Bank Nifty below 53,000.

"Risk will rise again only if Nifty closes below 23,200 and Bank Nifty below 53,000," he said. He added that easing concerns over foreign investors selling, positive developments on India-US trade discussions and expectations from policy decisions could support market sentiment in the near term.