India’s equity indices staged a recovery on Monday, bucking the rout across Asia, commodities and precious metals, as short covering helped markets erase a portion of the budget day losses.

The NSE Nifty rose 262.95 points, or 1.06%, to close at 25,088.40, while the BSE Sensex gained 943.52 points, or 1.2%, to end at 81,666.46. The rebound came after both indices dropped nearly 2% in the special budget trading session on Sunday, spooked by the government’sunexpected proposal to increase securities transaction tax (STT) on equity derivatives by 20-150%.

“Sunday’s volatility was amplified by the absence of market makers such as FIIs (foreign institutional investors) and other large institutional participants,” said Ramesh Mantri, chief investment officer at WhiteOak Capital AMC.

“Some recovery was seen as concerns around the hike in STT on F&O eased, given that it is not a significant negative for the broader market.”

Gold and silver on Monday continued their declines from the previous week over news of Kevin Warsh being President Donald Trump’s choice for the next US Federal Reserve chairman, exten- ding the sell-off across precious metals. In his previous stint with the American central bank, Warsh was known to be a hawk, though in recent times he has been talking about lowering interest rates. Gold was down 3% and silver stumbled 4% in international markets, while Brent crude dropped 5% to nearly $65 a barrel on Monday evening after Trump said Iran was “seriously talking” with Washington.

The nervousness in precious metals spilled over into Asian equities with South Korea tumbling over 5%. Japan fell 1.25%, China declined 2.5%, Hong Kong lost 2.2%, and Taiwan dropped 1.4%.

Europe’s Stoxx 600 was up 0.2% at the time of publication.

Markets’ 1%+ Bounce
Analysts said the decline in global commodity prices, mainly crude, lifted sentiment in Mumbai.

“Markets saw a recovery driven by multiple factors, including a correction in crude oil and commodity prices, strong auto sales numbers, and growing acceptance that the STT hike will have a limited impact,” said Sunny Agrawal, head of fundamental research at SBI Securities. “Indices also saw some short covering as markets were oversold, which further supported sentiment.”

Analysts said the Nifty’s closing at 24,825.45—above a key support zone—also aided liquidation of some bearish bets.

“As the indices had already undergone a price correction ahead of the budget, the risk-reward has turned more favourable at lower levels,” said Ruchit Jain, vice president at Motilal Oswal Financial Services. “The RSI (Relative Strength Index) has entered the oversold zone, making buying attractive as long as Nifty remains above the 24,500–24,800 range, which was seen in Monday’s trade.”

The Volatility Index (VIX) —the NSE’s gauge of market fear—fell 8.1% to 13.87 after spiking more than 11% in Sunday’s session.

The broader market gained as well, with the Nifty Midcap 150 rising 1% and the Nifty Smallcap 250 gaining 0.6%.

On BSE, 1,898 stocks advanced and 2,384 declined. Foreign portfolio investors sold stocks worth ₹1,832 crore, while domestic institutional investors (DIIs) were buyers to the tune of ₹2,446 crore.