Markets witness dramatic recovery.

      Recovering from day’s low and shifting gears, local equity markets were trading into positive territory tailing positive start of European counterparts, while bargain hunting of select fundamentally strong blue-chip stocks, available at attractive valuation post sharp sell-off in early noon deals, also aided sentiment. Markets took a hit for the worst as RBI introduced no special measures for managing liquidity, slashed HTM ceiling and stroke a hawkish tone on inflation front by projecting an upside risk to 2016 inflation target of ‘6%’, the aftermath of which was widely felt by banking stocks. However, buying, which took place after positive European markets mainly got the benchmarks out of the woods, with both Sensex and Nifty trading above the psychologically crucial 25,750 and 7,700 levels respectively. Meanwhile, broader indices also bouncing back were trading with gains of around half a percent.
     recovery of markets was mainly led by stocks from Consumer Durable, Realty and Information Technology counters, besides Auto stocks which held their head above water even at day’s low point. On the flip side, selling in Capital Goods, Power and Infra counters continued to remain the pockets of weakness for the markets. Gains also crept into Dalal Street after shares of rate-sensitive sectors such as banks, auto and real estate, which came under selling pressure post the Reserve Bank of India (RBI) review, managed to recoup losses after Raghuram Rajan assured investors that short-term risks were more balanced currently and the RBI had room to cut rates if disinflation continues. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1591:1202; while 125 shares remained unchanged.