Markets recover despite Fed’s taper talk

MUMBAI: Indian markets recovered losses during late trade on Monday after remaining under pressure following a global selloff.Weak currency, rising crude prices and fears related to sustainability of foreign institutional investor inflows because of the taper talk by the US Federal Reserve had increased the concerns of investors in the past couple of days.

The BSE Sensex rose 230.01 points or 0.44% at 52,574.46. The Nifty edged 63.15 points or 0.40% higher at 15,746.50.

Shares in the Asia-Pacific region were mostly lower. Japan’s Nikkei fell more than 3%, while Hong Kong’s Hang Seng index dropped 1.28% and South Korea’s Kospi declined 0.83%.

Investors are continuing to sell equities as statements by officials of the Federal Reserve indicated that the shift towards faster policy tightening was a natural response to economic growth and particularly inflation. Analysts feel a gradual tapering seems the most likely scenario for most economies, including India.“Domestic equities witnessed brisk recovery after seeing steep gap-down opening today and shrugged off weak global cues once again. Notably, strong rebound in PSU banks was a prime factor for the market’s recovery,” said Binod Modi, head strategy, Reliance Securities.“Minutes of the Reserve Bank of India (RBI’s) policy meeting published were favourable and indicate continued accommodative stance from the RBI to spur economic activities in the country,” Modi said.Relaxed lockdown measures and moderating cases have expectedly triggered a snapback in mobility, according to Nomura. “A third pandemic wave over the next few months is a key risk that bears monitoring,” it said.The Nomura India Business Resumption Index, which tracks high-frequency data, rose to 81.3 for the week ending 20 June, up 6.4 percentage points from the previous week.