Indian equity benchmarks staged a strong recovery on Tuesday, erasing previous session’s losses, driven by robust performance in metal and banking stocks amid positive cues from Asian markets and expectations of stimulus measures from China.
The BSE Sensex closed at 79,476.63, gaining 694.39 points or 0.88 per cent, while the NSE Nifty 50 advanced 217.95 points or 0.91 per cent to end at 24,213.30. The recovery came after Monday’s decline, with markets showing resilience despite uncertainty surrounding the U.S. presidential election.
Metal stocks led the rally, with JSW Steel emerging as the top Nifty gainer, surging 4.57 per cent, followed by Tata Steel at 3.74 per cent and Hindalco at 3.51 per cent. The sector’s strong performance was attributed to positive developments in China’s steel sector.
“China’s national steel PMI increased by 5.6 points to 54.6 in October and returned to expansion territory for the first time after March 2023. This led to buying interest in metal stocks,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
Banking stocks also contributed significantly to the day’s gains, with the Bank Nifty climbing 992 points or 1.94 per cent to 52,207.25. Axis Bank rose 2.71 per cent, while the Nifty Financial Services index advanced 1.98 per cent to 24,128.90.
However, some stocks faced selling pressure. Trent emerged as the top loser, declining 1.71 per cent, followed by Adani Ports (-1.50 per cent), Asian Paints (-0.87 per cent), ITC (-0.75 per cent), and Infosys (-0.60 per cent).
Market breadth remained positive with 2,468 stocks advancing against 1,478 declining on the BSE. Additionally, 207 stocks hit 52-week highs while 22 touched 52-week lows.
JSW Steel led the gainers among Sensex stocks, rising 4.72 per cent to ₹999.95, followed by Tata Steel (+3.64 per cent) and Axis Bank (+2.73 per cent). HDFC Bank gained 2.56 per cent, and IndusInd Bank also posted a 2.49 per cent increase. On the losing side, Adani Ports fell 1.46 per cent, while ITC dropped by 0.96 per cent. Asian Paints, Bharti Airtel, and Infosys recorded smaller declines of 0.91 per cent, 0.80 per cent, and 0.63 per cent, respectively.
“The domestic market experienced a sharp recovery amid uncertainty surrounding the likely downgrade in Q2 GDP forecast and closely contested U.S. presidential election. However, the recent rebound in domestic manufacturing activity data, along with the expected revival of consumption in H2, are likely to support market sentiment,” said Vinod Nair, Head of Research, Geojit Financial Services.
Oil prices also influenced market sentiment as OPEC+ postponed its December output increase by a month. Brent crude rose 3.1 per cent to $75.34, while WTI increased 3.2 per cent to $71.73.
“Markets witnessed a remarkable turnaround towards the closing hours as value buying in banking stocks along with gains in metals and oil & gas stocks aided broad market recovery. Optimism across Asian and European indices ahead of the US election outcome boosted local traders’ confidence,” noted Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
The India VIX, which measures market volatility, dropped by 3.39 per cent to close at 16.1225, indicating reduced market uncertainty.
FIIs/FPIs saw a net outflow of ₹4,329.79 crore, while DIIs had a net inflow of ₹2,936.08 crore, partially balancing the FII impact. Clients recorded a net outflow of ₹128.03 crore, NRIs had a small inflow of ₹7.75 crore, and proprietary traders posted a modest inflow of ₹9.22 crore.
Looking ahead, market analysts suggest watching key technical levels. “If prices sustain above the 24,400 mark, this could confirm a bullish reversal, potentially propelling the index toward the 24,800 and 25,200 levels in the upcoming week. On the downside, immediate support is expected around the 23,650–23,500 levels,” said Mandar Bhojane, Research Analyst, Choice Broking.
Chinese officials are expected to announce approximately $140 billion in extra budget spending, primarily for indebted local governments and banks, which could further influence market sentiment in the coming days.