After eight long days of losses, the Indian stock market finally saw a glimmer of hope. A last-minute surge of buying, particularly in major financial stocks, pulled the Nifty and Sensex out of the red and brought an end to the prolonged downward trend. This dramatic turnaround, fueled by renewed interest in financial giants like HDFC Bank, IndusInd Bank, Bajaj Finserv, and Shriram Finance, offered some relief to investors who had been watching their portfolios shrink.
The day started with a sense of unease, as the indices continued their slide, seemingly heading towards a ninth consecutive day of losses. However, in the final hour of trading, the tide began to turn. Investors, perhaps sensing that the market had reached a bottom, started buying up shares, especially in the financial sector. This late surge proved to be the catalyst for the market's recovery.
Analysts had been anticipating a rebound, as the eight-day decline had pushed the market into what they termed "oversold" territory. The question wasn't if a rally would happen, but when. One fund manager at a domestic brokerage had noted that a "relief rally" was overdue, though how investors would react to it varied. Some might see it as a chance to sell, others to gamble on further gains, and still others to simply wait and watch their portfolios recover.
At the closing bell, the Sensex had edged up by 57.65 points (0.08 percent) to reach 75,996.86, while the Nifty climbed 30.25 points (0.13 percent) to settle at 22,959.50. While these gains were modest, they were significant in breaking the eight-day losing streak. The volatility index, India VIX, also saw a 6% jump, indicating the market's heightened nervousness.
While large and mid-cap stocks managed to recover from their intraday lows, small-cap stocks continued to face pressure. The BSE Smallcap index ended the day down 0.6 percent. Despite the day's recovery, broader market concerns remain. Factors like persistent selling by foreign investors, a weakening rupee, fears of trade wars, and high valuations combined with slowing earnings growth continue to weigh on market sentiment.
Despite the day's positive close, experts like Sanjeev Prasad of Kotak Institutional Equities warn that while large-cap valuations might be reasonable, small and mid-cap stocks, especially in sectors like railways and metals PSUs, remain overvalued and could see further declines. However, JM Financial analysts point to historical data, suggesting that after such a long losing streak, a stronger rebound in the Nifty could be on the cards. Technically, 22,800 is seen as a strong support level for the Nifty, while 23,100 is a key resistance level.
Sector-wise, pharma stocks led the gains, while IT, media, and FMCG stocks lagged. Heavyweights like HDFC Bank, Reliance Industries, and IndusInd Bank were the top drivers of the Nifty's recovery. While some stocks like Manappuram Finance and Ashok Leyland saw significant gains, others like PB Fintech and Zen Technologies faced continued selling pressure. The market's rebound offers a temporary reprieve, but the underlying concerns remain, making for a potentially volatile period ahead.
Prameya or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices.
