Closing Bell: Sensex rebounds 768 pts from day's low, Nifty50 reclaims 17,200; PVR, Inox Leisure surge

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Reliance Industries, ICICI Bank, Bharti Airtel and Axis Bank were the biggest contributors to the bounceback in headline indices.

"The current volatility is due to elevated commodity prices and the resultant downgrade of future earnings growth. Product prices have been increasing constantly and expected to increase further in the future, affecting demand and margins. Uncertainties due to rising COVID cases especially in China also added to the weakness," said Vinod Nair, Head of Research at Geojit Financial Services.

Broader markets, however, failed to make it to positive territory. The Nifty Midcap 100 index declined 0.2 percent at the close. Its smallcap counterpart fell 0.7 percent.

In the midcap and smallcap segments, Escorts, Endurance Tech, Valiant Organics and Spandana Sphoorty -- dropping around 6-8 percent -- were among the top losers. Supreme Petro, Gujarat Alkalie, Lemon Tree and JK Tyre -- rising around 6-12 percent -- were among the top gainers.

PVR rose 3.1 percent and Inox Leisure 11.3 percent after the multiplex operators announced a merger.

Overall market breadth was in favour of the bears, with an advance-decline ratio of 1:2 as 658 stocks rose and 1,449 fell on NSE.

European shares began the day on a positive note, shrugging off weakness across most Asian markets as a coronavirus lockdown in Shanghai fuelled worries about weak demand. The Stoxx 600 index was up 0.7 percent at the last count.

S&P futures were flat, suggesting a muted start ahead on Wall Street.

The Nifty has once again took support at its 200-day simple moving average near 17,000 and settled above the 50-day moving average, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

"However, the broader texture of the market is still non-directional. In the near future, as long as the index holds 17,100, the market is likely to retest 17,325-17,400 level, and a falls below it could trigger weakness till 17,000-16,950," he said.