The Indian stock market staged a notable rebound in the trading session on Tuesday after witnessing four consecutive days of selling pressure, which had pushed both the Sensex and the Nifty to a seven-month low in the previous trading session.
The Nifty ended the session with a gain of 0.39% at 23,176, while the Sensex closed at 76,499 marking a 0.22% increase from the previous close. Midcap and smallcap stocks, which had been under bearish pressure in recent sessions, also managed to end higher.
The Nifty Smallcap 100 index rose by 1.98% to 17,257, and the Nifty Midcap 100 index concluded the day with a gain of 2.45%, closing at 53,676.
Despite ending the session in the green, the front-line indices gave up their early gains towards the end. In line with the frontline indices, the broader market also came off its highs during the session but managed to outperform.
Today's rebound in markets was largely driven by gains in banking, auto, and metal stocks. Adani Group stocks ended higher, buoyed by speculative buzz around potential fundraising plans.
Factors such as a strong recovery in the Indian rupee, a decline in crude oil prices, domestic inflation hitting a four-month low, and value buying at lower levels, along with positive global cues, particularly from China, collectively helped the markets end in positive territory.
Whether this recovery continues in the upcoming trading sessions will depend on U.S. inflation figures, with the Consumer Price Index (CPI) report scheduled for release on Wednesday.
Market participants will also be watching the jobless claims data on Thursday, which provide further clarity on the US economy after Friday’s blowout nonfarm payroll figures.
Commenting on today's market performance, Prashanth Tapse of Mehta Equities said, “As markets were on a downward spiral for the past few sessions, a short-term recovery was on the cards. Selective buying in banking, telecom, auto, power, and metal stocks aided positive sentiment, while broader equity markets too performed well with midcap and smallcap stocks witnessing a sharp rebound.”
"However, caution will continue to prevail as the rupee's fall coupled with strong FII fund outflows will remain a major deterrent for markets," Prashant added.
Vinod Nair of Geojit Financial Services said, "A rebound in the global market and an ease in domestic CPI inflation provided respite to the broader indices. This may provide some leeway for RBI in its next policy meeting; however, rising oil prices and higher 10-year yields will be watched carefully. The IT sector weighed down amid concerns over weak earnings guidance for Q4. The domestic sentiment will be more inclined towards the ongoing earnings season and upcoming union budget, which has a mixed view."
Among sectors, the Nifty Metal emerged as the top gainer with a 4% rise, as 14 out of 15 constituents of the index ended the session higher. This was followed by the Nifty PSU Bank, which gained 3.28%, with all 12 constituents of the index closing in positive territory.
IOB emerged as the top gainer with an 18.3% rise, followed by other stocks such as Central Bank, UCO Bank, Punjab & Sind Bank, and Bank of Maharashtra, all ending with gains of over 10%.
Other sectoral indices, including Nifty Energy, Nifty Media, and Nifty Auto, ended the trade with gains ranging between 2% and 3%. On the flip side, the Nifty IT index tumbled 1.89%, impacted by a sharp fall in HCL Technologies shares, while the Nifty FMCG index also concluded the session with a 1.35% drop.
All 11 Adani Group stocks ended Tuesday's trading session with sharp gains on reports of fundraising plans. Among the top performers, Adani Power led the list with a gain of 20%, settling at ₹539.9 apiece, followed by Adani Green Energy and Adani Energy Solutions, which ended with gains of 13.5% and 12.2%, respectively.
Other Adani Group stocks, such as Adani Enterprises, Adani Total Gas, and Adani Ports & SEZ, also ended with gains of over 5%. Similarly, NDTV, ACC, Ambuja Cements, and Sanghi Industries recorded gains between 4% and 7%.
Adani Group shares are rising due to speculative buzz about the fundraising, said Anshul Jain of Lakshmishree Investment and Securities.
“The market expects Donald Trump's re-entry at the White House to make it easier for the Adani Group to raise overseas funds, and hence, we are witnessing fresh buying interest in Adani Group shares,” said Jain.
(By arrangement with livemint.com)
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