(RTTNews) - Indian shares reversed steep early losses to end modestly higher on Thursday.
Domestic markets staged a gap-down opening, with benchmark indexes Sensex and Nifty declining around 2 percent in early trade, as U.S. President Donald Trump's address to the nation on the war in the Middle East damped hopes for a swift resolution to the conflict.
The dollar and bond yields surged, and oil prices jumped more than 7 percent after Trump said the U.S. military goals were "nearing completion," and that Iran would be hit "extremely hard over the next two to three weeks," raising the risk of more extensive damage to energy infrastructure throughout the Gulf.
The Iranian military has responded to Trump's latest remarks, warning that the war in the Middle East will continue until the United States faces what it described as "lasting humiliation and surrender".
In a statement, Ebrahim Zolfaghari, a spokesperson for Iran's Khatam al-Anbiya Central Headquarters, threatened to launch "stronger, wider, and more destructive" attacks against the U.S. and Israeli forces, and maintained that key defense assets, including missile production facilities, long-range attack and precision drones, modern air-defense systems, electronic warfare, and electronic warfare capabilities, remain intact and operational.
Both Sensex and Nifty experienced a significant afternoon recovery amid value buying at lower levels and the Indian rupee's sharp rebound from record low levels.
The rupee surged by more than 200 paise to hit 92.89 against the greenback as the Reserve Bank of India (RBI) announced more actions focused on authorized dealers.
After putting a limit of $100 million on net open rupee positions of banks earlier, the central bank has come up with another notification, refraining banks from offering rupee non-deliverable forwards to resident and non-resident clients. Also, it was said that companies cannot rebook cancelled forward contracts.
The benchmark BSE Sensex hit an intraday low of 71,545.81 before recovering all losses to end up 185.23 points, or 0.25 percent, at 73,319.55.
The broader NSE Nifty index ended up 33.70 points, or 0.15 percent, at 22,713.10, after having hit a low of 22,182.55 earlier in the day.
The BSE mid-cap index slipped 0.2 percent while the small-cap index closed marginally higher.
The market breadth was strong on the BSE, with 2,668 shares rising while 1,559 shares declined and 160 shares closed unchanged.
IT stocks, banks and financials led the intra-day rebound, with Bajaj Finance, HDFC Bank, TCS, Infosys, Tech Mahindra and HCL Technologies rallying 1-3 percent.
Among the prominent decliners, Sun Pharma, Asian Paints and Eternal all fell around 2 percent.
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