Mumbai, Feb 14 : The domestic market staged a recovery from day's low, buoyed by renewed buying interest in banking stocks on Wednesday, said Vinod Nair, Head of Research at Geojit Financial Services.

At close on Wednesday, Sensex was up 267.64 points, or 0.37 per cent, at 71,822.83, while Nifty was up 96.80 points, or 0.45 per cent, at 21,840.05.

Improving asset quality and the government's continued focus on fiscal prudence attracted PSU banks, yet concerns lingered regarding their elevated valuations, Nair said.

The optimism was further supported by favourable inflation figures from the UK, contributing to a widespread recovery.

However, IT shares experienced selling pressure following the release of higher-than-expected US CPI, prompting concerns over potential delays in interest rate cuts and its impact on client spending, Nair said.

Domestic equities recovered smartly to close near the day's high after opening on a negative note after US inflation came in higher than expected, said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.

"Nifty gained more than 1.5 per cent from intra-day low to close with gains of 97 points (+0.5 per cent) at 21,840 levels near the day's high. All sectors ended in green, barring IT and pharma," Khemka said.

On the global front, US inflation came at 0.3 per cent higher than expected, dashing the hopes of rate cuts in the near term. This impacted the sentiments and the market saw a gap-down opening. However, strong buying emerged at lower levels, lifting market sentiments. The broader market outperformed with Nifty Mid/Smallcap Index gaining 1 per cent/1.6 per cent, respectively, he said.

"With the results season almost over, the focus will shift to global cues and economic data points. Overall, we expect the market to see a gradual up move on the back of strong fundamentals," Khemka said.

Meanwhiloe, the IT Index declined due to higher-than expected US inflation, raising concerns about delayed interest rate cuts and impacting client spending, said Vinod T.P., Research Analyst at Geojit Financial Services.

Despite short-term volatility, higher interest rates, and US economic worries, optimism prevails in the sectors owing to emerging tech opportunities like Gen AI, ML, and Cloud, which promise long-term growth prospects for Indian IT firms, he said.

/IANS