Indian shares erased initial steep losses on short-covering, as the rupee recovered from a record low of 54.91 versus the dollar and state-run lender SBI reported better-than-expected fourth-quarter results, aided by higher interest income and lower provisioning for non-performing assets.
Investors, meanwhile, shrugged off government data that showed India's April CPI inflation accelerated to an annual 10.36 percent from 9.38 percent in March.
Shares of SBI jumped 5.1 percent after the country's largest lender reported a forecast-beating net profit of Rs 4,050 crore for the fourth quarter of FY12, up from Rs.21 crore in the corresponding period last year, boosted by strong credit demand and a sharp decline in provisions for bad loans. Private sector rival ICICI bank rose 2.3 percent and HDFC Bank gained 0.6 percent.
Staging a dramatic recovery, the benchmark 30-share Sensex recovered about 350 points from the day's lows to end up 82 points or 0.51 percent at 16,153, with 19 of its components advancing.
Besides banking stocks, major gainers included Sterlite, NTPC, Gail India, ITC and Jindal Steel, which rose around 2 percent each. Index heavyweight Reliance Industries gained half a percent, while its rival state-run ONGC closed up a percent.
Drugmaker Sun Pharma edged up modestly after receiving the U.S. FDA approval for a generic drug, software services exporter Infosys gained 0.6 percent, property developer DLF added 0.7 percent and utility vehicles manufacturer Mahindra & Mahindra advanced 1.2 percent.
Automakers sold off heavily, with Tata Motors tumbling 4.1 percent after reporting flat global sales in April. Carmaker Maruti Suzuki tumbled 3.3 percent, hit by the declining rupee value, while Bajaj Auto lost 2.6 percent.
Power-equipment major BHEL lost 2.1 percent, steel maker Tata Steel declined 1.5 percent, Coal India declined 1.1 percent ahead of its earnings results later today and Bharti Airtel shed 0.3 percent after slashing 3G data tariff.
The broader Nifty index rose by 21 points or 0.44 percent to 4,891, while the BSE mid-cap and small-cap indexes ended in the red. The market breadth was fairly negative, with losing shares outpacing gaining ones by 1464 to 1228 shares on the BSE.
Mahindra Satyam soared 5.8 percent on posting solid Q4 earnings. Aviation stocks like Kingfisher, Jet Airways and SpiceJet climbed 3-9 percent on FDI hopes in aviation.
Elsewhere, other Asian markets fell sharply, as fears of contagion from Greece's political turmoil and deepening worries about the health of Spanish banking system following reports of customers withdrawing more than 1 billion euro from Bankia -the recently nationalized Spanish bank, rattled investors. Weak readings on the U.S. economy and concerns of a hard landing in China amid the recent spate of poor data also raised fears of a global slowdown.
Hong Kong's Hang Seng index fell 1.3 percent, China's Shanghai Composite lost 1.4 percent, Australia's All Ordinaries index shed 2.6 percent, Japan's Nikkei tumbled 3 percent and South Korea's Kospi average slumped 3.4 percent.
European markets extended recent losses, with key benchmark indexes in France, Germany and the U.K. trading down between 0.3 percent and 1.2 percent,as fears of possible contagion from Spain's ailing banking system and continued concerns about Greece's future spooked investors.
Moody's announced a sweeping downgrade of 16 Spanish banks, citing rising loan defaults, a renewed recession in Spain, restricted funding access and the reduced ability of the Spanish government to support lenders.
Separately, Fitch downgraded debt-laden Greece's credit rating by one notch deeper into junk territory, warning of a "probable" Greek exit from the 17-country euro currency union.
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Market Analysis
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.