The Sensex staged a strong recovery in afternoon trade after falling as much as 1.4 per cent or 335 points in early trade following a crash in China markets. Higher European markets helped the recovery of Indian markets. The recovery in Sensex was led by Reliance Industries which surged over 3 per cent.
As of 2.15 p.m., the Sensex was down 39 points at 24,895 and the 50-shares Nifty traded 18 points lower at 7,583. The Indian rupee also recovered against the dollar and was trading at 66.73 after falling to 66.93 at intraday low.
Here is a 10-point cheat-sheet
1) Energy and auto shares led the recovery in Sensex, with RIL and Tata Motors gaining nearly 3 per cent. Other stocks like Vedanta, Power Grid, Axis Bank, Maruti Suzuki also surged over 1 per cent to support the Nifty.
2) European markets moved higher on Monday, shrugging off weaker Asian indices. The CAC 40 index was up nearly 1 per cent while the FTSE 100 index added 0.25 per cent.
3) China shares ended with over 5 per cent losses even though the Chinese central bank guided its yuan currency stronger for a second straight session on Monday. The currency move might calm concerns about how ready Beijing is to let the currency depreciate, but added to doubts over the ultimate policy intent.
4) Despite the recovery in Indian markets today, most analysts are yet to say that the worst might be over for Indian markets. Market expert Sudip Bandyopadhyay said, "It is too early to say that the worst is over for Indian markets, which currently have a weak bias. The developments in Chinese currency and economy needs to be closely watched."
5) However, some analysts, including Mr Bandyopadhyay, suggested that investors should accumulate stocks from a long-term perspective taking advantage of the current market volatility. The turmoil in Chinese markets could drive inflows into India, which remains a positive story among emerging markets, they say. "It is the perfect time for buying India (Indian equities). Because if ever there has been a case for India outperforming China, it is now," said Sanjiv Bhasin, executive vice president for markets & corporate affairs at India Infoline.
6) A tumble in Chinese markets had led to a global selloff last week with Nifty slumping 4.5 per cent during the week.
7) Foreign investors sold Indian stocks worth nearly Rs 3,000 crore last week on a net basis, weighing on Indian markets. However, domestic institutional investors bought Indian equities worth nearly Rs 1,350 crore providing some support.
8) Market analysts don't rule out the possibility of Nifty slumping to 7,300 levels, driven primarily by global concerns, particularly depreciation of Chinese currency yuan and worries about China's economy.
9) However, Indian markets could rebound sharply, they say, if third-quarter earnings of Indian corporates surprise on the upside and there are positive developments on the GST front.
10) TCS reports its Q3 earnings tomorrow, kicking off the results season.