Indian benchmark indices recovered from early losses on Tuesday despite a poor performance from the ruling Bharatiya Janata Party in state elections and the resignation of Reserve Bank of India Governor Urjit Patel. The markets recovered after tumbling heavily in the morning trade because of Patel’s resignation on Monday evening.
The BSE Sensex closed 190.29 points higher at 35,150.01, and the National Stock Exchange Nifty 50 rose 60.70 points to finish at 10,549.15. Earlier, within minutes of opening at 9 am, the Sensex had declined over 500 points and the Nifty 50 nearly 150 points.
“Markets have probably given a thumbs-up to a formation of stable government in various states,” AK Prabahakar, head of research at IDBI Capital told BloombergQuint.
The rupee slid to a one-month low of 72.46 per dollar, down over 110 paise in early morning trade, but recovered to trade 49 paise lower at 71.83 at 3.50 pm.
Yes Bank was the top gainer on both indices. On the Sensex, other stocks that rose the most were Sun Pharmaceuticals, Asian Paints, State Bank of India and Axis Bank. On the Nifty 50, these were Sun Pharmaceuticals, Asian Paints, Titan Company and Zee Entertainment.
Hero MotoCorp was the top loser on the Sensex, followed by Bharti Airtel, HDFC Bank, ICICI Bank and Adani Ports. On the Nifty, stocks of Hindustan Petroleum Corporation Ltd, Indian Oil Corporation, Bharti Airtel, HDFC Bank and Bharat Petroleum Corporation Ltd were the top losers.
Patel’s resignation on Monday was the culmination of a series of events that were seen as an ongoing spat between the central bank and the government. It had started in October, when Patel’s deputy, Viral Acharya, had said that governments that do not respect a central bank’s independence sooner or later incur the wrath of financial markets.