Markets have recovered from the day's low led by minor gains in the Chinese markets as they shrug-off rate hike concerns. The S&P CNX Nifty index opened in the red and dipped below 6000 to touch a low of 5,991.5. Recovery in oil & gas shares helped Nifty scale the day's high of 6,038.10; currently the index is down 4 points to 6022. The benchmark Sensex has fallen 4 points to 19,986.
Heavy sell-off was seen in commodity stocks during the morning session after China unexpectedly raised interest rates yesterday first time in three years to curb the red-hot property markets, also hinting monetary tighetning.
China's central bank increased one year lending rate and deposit rate by 25 bps. Chinese financials gave a thumbs up to this move, which helped Shanghai Composite recover from 2% drop, ending the morning session 0.8% higher at 3,024.41. Even International Monetary Fund's Managing Director, John Lipsky said China's interest rate hike is a welcome move and will support growth in world's fast growing economy.
Hong Kong's Hang Seng pared morning losses, the index rose 0.6%; broader Asian indices, Seoul Composite and Taiwan Weighted also surged over 0.8% each.
Selling pressure continued on Japan's Nikkei Average, the index ended down 1.7% (provisionally).
Metal stocks in India joined the global commodity sell-off; Sterlite, Sesa Goa, Tata Steel and SAIL have fallen by almost 2% each.
Financials have also been leading the losses; HDFC Bank, Axis Bank and HDFC are all trading marginally in the red.
Wipro, ONGC, NTPC and Tata Power are the top gainers on Sensex, up over 1% each. While Sterlite Industries, HDFC, Tata Steel and Bharti Airtel are the top losers, down almost 2%.
