The Sensex and Nifty rebounded from Wednesday's lows but the indices still await positive cues from global markets and developments at home which could lead to a sustained recovery.
Even as BSE market capitalisation rose to Rs 1,48,00,614 crore signalling a gain of nearly Rs 4.63 lakh crore since Monday's lows, analysts say market is witnessing a short-term recovery which may not continue in the near future.
Vinod Nair, head of research at Geojit said, "Whereas in the medium term, the market is under a tactical shift within the financial asset classes from equity to bonds. This negative trend will stabilise as valuation sets to a normal level along with reduction in bond yield. For example, Sensex has given a return of about 45% over the last 2 years, without a meaningful correction in price and time other than a short-term volatility during demonetisation."
On Tuesday, the Sensex fell 1,275 points and Nifty was down 390 points within minutes of opening on US stocks crumbling under the effect of high government bond yields.
Since February 1, the Sensex has lost 1,708 points and Nifty is still down 491 points taking into account the recovery market staged today.
While Sensex rose 330 points or 0.97% to 34,413 level, Nifty staged a 100 point (0.96%) recovery from Wednesday's lows