Sensex rebounds 1,350 pts; Nifty reclaims 22k; Here are the factors driving buying at D-St

After a steep selloff at the opening tick, Indian benchmark indices scripted a solid rebound during the trading session on Friday as the geopolitical tensions in the Middle eased, supporting the crude oil prices and India votes for the first round of election on April 19.

BSE Sensex rebounded close to 1,350 points to reclaim 73,000 mark. The BSE's barometer rose from day's low at 71,816.46 to 73,162.74 at 2.15 pm. NSE's Nifty also seen above 22,000-levels, recovering more than 400 points from day's low at 21,777.65 to 22,178.50 as of the same time.

Trend in the broader market was mixed as BSE midcap index was down 0.3 per cent, while the BSE smallcap index rose one-fourth per cent. However, the advance-decline ratio was still in the favour of bears as 1,961 were trading in red against 1,761 stocks gaining in the session. 126 stocks remained unchanged.

Here are the key factors that lead to the buying on Dalal Street

Eased Geopolitical Concerns
The rising tussle between Iran and Israel took a breather as Irani officials said that they do not intend to take any immediate retaliation against Jewish State. The eased down turmoil between the two states led to buying at Dalal Street.

Elections in India
India enters the voting for the general elections of 2024 as the polling kicks-off on more than 100 seats spread across 21 states and Union Territories of the company. It is the first phase if seven phases, making it the world's largest electoral exercise. Dalal Street is expecting a third tenure for incumbent Modi Government.

Crude give up gains
The crude oil prices gave up their early gains to trade flat, at best, marginally higher. Brent oil futures were seen at $87.30 at 14.30 IST. Earlier in the day, oil prices jumped $3 a barrel on concern that Middle East oil supply could be disrupted.

Heavyweight buying
Buying in the heavyweight counters including HDFC Bank, Bharti Airtel, ICICI Bank, ITC, Bajaj Finance led the rally. HDFC Bank, which was up more than 2 per cent, contributed more than 200 points of the Sensex's gains. Bajaj Finance, Airte and ITC added more than 50 points each.

Technical View
Bears are seizing the opportunity amid Middle East tensions. However, for a sustained rally at Dalal Street, positive surprises in inflation, geo-political developments, or Q4 earnings are crucial. Wall Street experienced volatile trading on Thursday, driven by corporate earnings and Fed commentary hinting at reduced rate cut expectations, said Prashanth Tapse, Senior VP (Research), Mehta Equities.

Amid concerns about US inflation, Nifty's immediate downside is pegged at 21710. FIIs were net sellers while DIIs bought. Nifty's trading range is projected between 21700-22200, with 22000 as crucial resistance, Tapse added with suggested to buy on dips strategy for the Nifty and Bank Nifty indices.