Sensex rises 350 pts from day’s low, Nifty near 23,400: Key reasons behind sharp market recovery

The latest market report highlights that Key market indices The two key benchmark indices pared their losses on September 22 due to various reasons, including value buying.

At 2:37 pm, the Sensex was down 106.96 points or 0.14% at 74,752.03, and the Nifty was down 24.65 points or 0.11% at 23,389.65. Around 2,005 shares advanced, 1,940 shares declined, and 169 shares were unchanged.

Key reasons behind markets paring losses

1) Value buying

Value buying emerged at softer marks as Sensex rose over 350 points from day's low and Nifty nearly reclaimed the psychologically important 23,400-mark. 2) Easing VIX

India VIX, the volatility gauge, eased 2% to 11.03 on September, which indicates traders at large don't see short-term pressure. 3) Technical reason

Nifty has to decisively trade below 23,300 for further softness to emerge in the markets, stated market watchers.

"Now, 23,300/74,500 would act as an immediate backing zone. As long as the market is trading above this level, the pullback formation is likely to continue.

"On the elevated side, 23,500/75,000 would be the immediate resistance zone for the bulls. Above this, the index could move toward 23,600-23,650/75,300-75,500. On the flip side, below 23,300/74,500, the sentiment could change. If it falls below this level, the market could retest the marks of 23,200-23,150/74,200-74,000," stated Shrikant Chouhan, Head Equity Research, Kotak Securities.

4) Brent crude falls below $100

Bullish sentiment returned to the market as Brent oil was trading below the $100 per barrel.

Brent declined toward $99 a barrel, after tumbling by nearly 8% over the previous four sessions. Japan’s Kyodo News Agency noted that Iran has proposed to reopen Hormuz within seven days if the American blockade is lifted. It stated Iran is trying to break a prolonged stalemate in the conflict and that the proposal will be used as the basis for discussions with mediating countries at the United Nations General Assembly.

President Donald Trump is set to address the United Nations General Assembly in New York later on Tuesday, and may meet with his Iranian counterpart, Masoud Pezeshkian, on the sidelines.

Al Jazeera additionally cited Iran’s Revolutionary Guard as saying it could negotiate to end the war if the country’s national interest required it.