After the 3 per cent crash on Monday, stocks markets on Tuesday recovered the losses and rallied by three per cent as reports that some of the Russian troops are being pulled out from the Ukraine border lifted the market sentiment.
The benchmark Sensex which plunged by 1,747 points on Monday jumped by 1,736 points to 58,142.05 and the NSE Nifty Index vaulted by 510 points to 17,352.45 in the last one hour of the trading.
The rally was led by banks, finance, realty, IT, capital goods, auto and energy stocks.
The broader markets too ended in a positive range of 2.6-2.9 per cent.
The rupee snapped its four-day losing streak to close 28 paise higher at 75.32 against the US dollar aided by the recovery in domestic stock market and weakness of the American currency overseas.
However, analysts expect the volatility to continue. In the absence of any major domestic event, updates related to Russia-Ukraine tension and its impact on global markets will be on the radar. “A ray of hope that tension between Russian and Ukraine is de-escalating, prompted a smart recovery in global equities. The domestic market followed the trend as oil prices edged lower. India’s CPI inflation for January rose to 6.01% breaching RBI’s tolerance level due to high food inflation and low base effect, this will be a point of concern for domestic market in the near-term,” said Vinod Nair, Head of Research at Geojit Financial Services.
Analysts said the reduction in tensions on Russia Ukraine front has led to buying interest and short covering in the markets. European stocks jumped after the Russian Defence Ministry reportedly announced that it had begun returning some troops to deployment bases after training exercises near the Ukrainian border.
However, the ongoing concerns like geo-political tensions, US rate hike and rising inflation could continue to keep investors on the edge and the markets may remain volatile.