After panic, market mood changes to exuberance

The stock markets staged one of the biggest intraday recoveries in recent times when the Sensex rebounded from a loss of over 3,300 points to close 1,300 points higher in a volatile session that saw a 5,000-point swing.

Earlier in the day, trading on NSE and BSE was stopped for 45 minutes after benchmark indices fell 10 per cent a few minutes into trading, as panic gripped the market following overnight sell-off in the global markets.

However, when trading resumed after the halt, domestic investors began bargain hunting at beatendown valuations, taking benchmarks in the positive territory.

The Sensex closed 1325 points higher at 34,103, after falling to 29,388 earlier in the session, while the Nifty closed 3 per cent higher, after hitting 8,555 at day's low.

The market regulator and stock exchanges, meanwhile, tried to reassure the market. The Sebi issued a statement saying that stock exchanges have a robust risk management framework in place, which automatically gets triggered in response to movement in the indices as well as stocks in the cash and derivatives market. It pointed to the Value at Risk (VaR) margin with initial margin to cover 99 per cent risk of a transaction and extreme loss margin to cover the residual risk of a transaction.

Investor wealth in BSE listed companies grew over Rs 3.55 lakh crore on Friday, taking the total market capitalisation to Rs 1,29,26,242.82 crore at the end of the session.

Concern over the economic impact of Covid-19 is expected to keep the market highly volatile.