Sensex bounces back to green, NSE up by 14.85 points

At 1:06pm, the Sensex traded at 35,059.18, up 99.46 points, or 0.28%, from Monday’s close of 34,959.72 points.

The benchmark BSE Sensex bounced back into the green on Tuesday, up nearly 100 points in intra-day trade after a fall of 500 points in the morning session, as Prime Minister Narendra Modi’s Bharatiya Janata Party took a slim lead in the Madhya Pradesh assembly elections.

Stocks, bonds and the rupee fell on Monday after exit polls of assembly elections in five states projected a likely setback for the BJP (Pratik Chorge/HT Photo)

At 1:06pm, the Sensex traded at 35,059.18, up 99.46 points, or 0.28%, from Monday’s close of 34,959.72 points. The Nifty50 on the National Stock Exchange traded at 10,503.30 points around noon, higher by 14.85 points, or 0.14%, from the previous close.

The Indian rupee weakened to 72 against the US dollar from its previous close of 71.34. The 10-year bond yield was down 2 basis points to 7.57% after rising as much as 12 basis points.

Stocks, bonds and the rupee fell on Monday after exit polls of assembly elections in five states projected a likely setback for the BJP. Also, there were apprehensions the shock resignation of Reserve Bank of India governor Urjit Patel will lead to a deep dive.

Election result trends from five states on Tuesday indicated that the BJP was locked in a close fight with the Congress in Madhya Pradesh’s seesaw election battle, while the opposition party was ahead in Chhattisgarh and Rajasthan.

Telangana’s ruling Telangana Rashtra Samithi looked set to retain power, and Mizoram’s Opposition Mizo National Front was surging ahead, according to the trends.

If the trends hold, the results would be a setback to PM Modi’s government, which is considered business-friendly, and could spook Indian markets that are already under pressure due to a wider current account deficit and the surge in crude oil prices, among other factors.

“Election results are not going the BJP way. But the rupee has recovered from the opening losses as central bank intervention may be occurring,” said Anindya Banerjee, the deputy vice president for currency and interest rates with Kotak Securities.