Mumbai, Aug 25 (HT) : The BSE benchmark Sensex recovered in early trade on Tuesday, up by 383.27 points while the Nifty was up by over 80 points after India’s share markets sank nearly 6% on Monday, the most in seven years, rattled by a wobbly Chinese economy that has sparked a global rout and raising concerns about costlier imports and other policy dilemmas for the government and Reserve Bank of India.
Indian shares rose more than one percent as regional markets rebounded despite continued fears that China's economy was risking a hard landing.
The broader NSE index gained 1.11% after slumping nearly 6% and hitting its lowest intraday level since October 2014 on Monday.
The benchmark BSE index rose 1.2% after hitting its lowest intraday level since August 2014 on Monday.
On Tuesday, most Asian markets opened marginally positive, bourses in Hong Kong, Taiwan, Singapore, Indonesia were trading cautiously up though Shanghai stocks tumbled 6.41% at the open, extending the previous day's plunge on mounting worries over China's faltering economy and its impact on global growth.
The rupee also made a recovery on Tuesday by 26 paise to 66.39 against the dollar at the Interbank Foreign Exchange in early trade today on fresh selling of the US currency by banks and exporters.
Dealers said fresh selling of the US currency by exporters and banks, and weakening of dollar overseas supported the domestic currency.
Gains in stock markets also helped rupee strengthen against the dollar, they added.
The rupee had tumbled sharply by 82 paise, its biggest single day fall this year, to settle at 66.65 against the dollar on Monday as global meltdown fears remained unabated.
In India, strategists say the Chinese depreciation of its currency yuan could likely trigger further depreciation in the emerging market currency basket including those that have high intensity of commodity exports and those that run high trade deficit with China.
“India runs a trade deficit of about $50bn with China and the total trade to China is near 10% of India’s total trade,” said Dhananjay Sinha, institutional research head at Emkay Global Financial Services.
The MSCI Asia Pacific Index climbed 1.6% in Hong Kong, while the S&P ASX 200 Index was up 2.4% in intra day trade.
“We expect markets to remain volatile in the coming trading sessions led by the negative global cues and the upcoming F and O (futures and options) expiry,” said Angel Broking chairman Dinesh Thakkar.
“However, fundamentals of the Indian economy remain intact. The markets would offer strong buying opportunities for long term investors to enter at attractive valuations. Once the selling from FIIs abate, investors could look towards export-driven sectors such as IT / pharma and quality names across private banks, auto and infrastructure,” he added.