Indian stock markets staged a strong recovery on Tuesday, breaking a six-day losing streak as investors engaged in bargain hunting and short covering.
The BSE Sensex climbed 584.81 points or 0.72 per cent to close at 81,634.81, while the Nifty 50 gained 217.40 points or 0.88 per cent to end at 25,013.15.
The market opened on a muted note but gradually gained momentum throughout the day, with the Nifty closing near its intraday high. Ajit Mishra, SVP of Research at Religare Broking Ltd, commented, “After six consecutive days of decline, the markets rebounded, gaining nearly 1 per cent. Following a flat start, the Nifty gradually climbed throughout the day, primarily driven by a recovery in select heavyweight stocks, and closed near the day’s high.”
Broad-based buying was observed across sectors, with auto, energy, and pharma leading the gains. The broader indices also participated in the recovery, with both advancing over 2 per cent each. Market breadth improved significantly, with 3,024 stocks advancing against 923 declines on the BSE.
Top gainers on the NSE included Trent (7.95 per cent), BEL (5.29 per cent), Adani Enterprises (4.94 per cent), Adani Ports (4.86 per cent), and M&M (3.56 per cent).
On the flip side, the top losers were SBI Life (-3.24 per cent), Tata Steel (-2.72 per cent), Titan (-2.35 per cent), Bajaj Finserv (-2.30 per cent), and JSW Steel (-1.66 per cent).
Among Sensex stocks, Adani Ports was the top performer after market close on 8/10/2024, gaining 4.76 per cent to end at ₹1,418.60. M&M followed with a 3.42 per cent increase, closing at ₹3,165.90, while Reliance rose 2.01 per cent to ₹2,796.05. HDFC Bank and Larsen & Toubro also saw gains, rising 1.95 per cent and 1.83 per cent, respectively.
On the losing side, Bajaj Finance slipped 1.12 per cent to ₹7,190.80, while JSW Steel declined 1.98 per cent. Bajaj Finserv, Titan, and Tata Steel were also among the top losers, dropping 2.27 per cent, 2.59 per cent, and 2.89 per cent, respectively.
Ameya Ranadive, Sr Technical Analyst at StoxBox, noted, “Investor sentiment was influenced by the vote count for assembly elections in Haryana and the Union Territory of Jammu and Kashmir, alongside ongoing concerns in the Middle East.”
The Nifty Bank index rose by 542.10 points or 1.07 per cent to close at 51,021.00, while the Nifty Financial Services index gained 231.75 points or 1.00 per cent to end at 23,452.85. The Nifty Next 50 and Nifty Midcap Select indices also saw significant gains of 2.35 per cent and 1.74 per cent respectively.
according to Hrishikesh Yedve, AVP Technical & Derivatives Research at Asit C Mehta Investment Intermediates Ltd., “Technically, Nifty formed an insider bar candlestick near its short-term support and demand zone. If Nifty holds above 24,690, levels of 25,150–25,350 are expected, making a “buy on dips” strategy suitable.”
“Bank Nifty also showed strength, recovering after initial volatility to close at 51,021. With the insider bar formation near its demand zone, the index should remain above 50,190 for a “buy on dips” approach, while 51,800 serves as the immediate resistance level.”
Technical analysts offered mixed views on the market’s short-term outlook. Nagaraj Shetti from HDFC Securities observed, “We observe Nifty in the process of forming double bottom type pattern around 24700 levels, which needs to be confirmed with more upside.”
Osho Krishan from Angel One Ltd cautioned, “For now, one should not get carried away with single day buying; rather, wait for a sustainable move and look for opportunities in a higher zone.”
The metal sector was the only one to close in the red, affected by profit booking and concerns over weak Q2FY25 earnings expectations. The Nifty Media index led sectoral gains, buoyed by news of potential acquisitions in the entertainment industry.
Prashanth Tapse from Mehta Equities Ltd highlighted, “The recovery was seen despite weak cues from Asian and European markets, although the short to medium term domestic market outlook remains hazy amid FPI sell offs and lingering West Asia conflict.”
As the market looks ahead, all eyes are on the Reserve Bank of India’s credit policy outcome expected on Wednesday. Investors and analysts will be closely watching for any signals on interest rates and economic outlook.
Foreign institutional investors (FIIs) and foreign portfolio investors (FPIs) were net sellers in the capital market, offloading shares worth ₹8,293.41. Meanwhile, domestic institutional investors (DIIs) recorded a net purchase of ₹13,245.12 crore.
Proprietary traders registered a net buy of ₹324.54 crore. Non-resident Indians (NRIs) were net sellers with a net outflow of ₹22.45 crore, while client category investors showed a net sell position of ₹541.80 crore.
Shrikant Chouhan of Kotak Securities provided a technical perspective, stating, “Technically, after a muted open market took the support near 24750/80800 and bounced back sharply. However, the larger texture of the market is still on the weak side.”
With 137 stocks hitting 52-week highs and 105 touching 52-week lows, the market showed signs of selective strength. As the quarterly earnings season approaches and macro-level developments unfold, market participants are advised to remain vigilant and exercise proper risk management in the current scenario.