Indian stocks recover from Monday's bloodbath; Sensex rises nearly 500 pts

New Delhi [India], August 30 : After a sharp sell-off in Indian stocks the previous session, they managed to recover some of the losses this morning due to broad-based resilience in the financial market fundamentals in India.
At 9.46 a.m. Sensex traded at 58,460.11 points, up 487.49 points or 0.84 per cent, whereas Nifty traded at 17,467.85 points, up 154.95 or 0.89 per cent.
Among Nifty 50 companies, 47 were in the green and the rest 3 in the red, National Stock Exchange data showed.
"Compared to the sell-off in the US markets last Friday, yesterday's correction in the Indian market was relatively mild. This is a reflection of the resilience of the Indian market. However, it is important to appreciate the fact that valuations in India are high," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"This calls for some caution. There is a possibility of further correction in the market in the near term. Financials, capital goods, autos, telecom and FMCG are strong segments attracting investment."
The Indian stock market's key indices, Sensex and Nifty, crashed over 2 per cent at a particular moment on Monday dragged by heavy selling in IT stocks after the US Federal Reserve signalled aggressive rate hikes.
The UD Federal Reserve Chair Jerome Powell had said the central bank won't back off in its fight against rising inflation.
Powell said in a speech to the central banking conference in Jackson Hole, Wyoming that the US economy will need tight monetary policy "for some time" before inflation is under control. The Federal Open Market Committee's (FOMC) focus right now is to bring inflation back down to the 2 percent target.
Meanwhile, rupee again retreated from 80 mark against US dollar on Tuesday to trade at 79.84.
On Monday, Indian rupee again breached the psychologically crucial 80 mark to touch an all-time low of around 80.11 in early trade tracking firmness in the US dollar.
"The fight to tame inflation is expected to continue in the distant future and the rate hikes are expected to put pressure on the rupee and other emerging market currencies," Santosh Meena, Head of Research, Swastika Investmart, had said.
The US dollar being the reserve currency of almost all countries is detrimental to other currencies, especially in times of sharp volatility in financial markets as it weakens peer currencies.
In mid-July too, the rupee slipped below 80 against the US dollar for the first time as high crude oil prices amid tighter global supplies boosted demands for the US dollar.