India’s stock markets rebound from one-year lows on short covering, GST hope
India’s stock markets rose on Tuesday, bouncing back from their lowest levels in a year as markets were seen as oversold, while sentiment was also helped after the government said it would make another attempt to pass the goods and services tax (GST).
India’s Parliamentary Affairs Minister Venkaiah Naidu told reporters the government might reconvene parliament to try to pass the GST after it failed to clear the upper house earlier this month.
Still, the session was very choppy with the NSE index falling as much as 1.8 percent at one point and rising as much as 1.5 percent, with sentiment still weak because of continued worries about a downturn in Chinese equity markets.
India’s volatility index, often called a fear gauge, hit its highest level since May 2014 and ended down 4.55 percent after surging 64.4 percent on Monday.
“When the market is oversold fresh buying will emerge and short covering will happen,” Alex Mathews head of research at Geojit BNP Paribas said.
The broader Nifty rose 0.92 percent to 7,880.70 points, snapping a three-day losing streak. It earlier hit its lowest since Aug. 12, 2014.
The benchmark BSE Sensex ended 1.13 percent higher after earlier falling as much as 1.7 percent to its lowest since Aug. 8, 2014.
Bank stocks bounced back to prop the Bank Nifty sub index up 2.27 percent. ICICI Bank (ICBK.NS) gained 5 percent, Axis Bank (AXBK.NS) rose 4.3 percent and Yes Bank (YESB.NS) advanced 8.1 percent.
All sectors ended in the green with the exception of export oriented sectors like IT stocks. Infosys (INFY.NS) fell 0.59 percent.
(Reporting by Karen Rebelo in Mumbai; Editing by Anand Basu)