Mumbai: Indian equity markets staged a sharp recovery on Tuesday, trimming early losses as the Sensex jumped nearly 300 points and the Nifty climbed back above the 26,000 mark, supported by buying in heavyweight stocks and improved global cues.
After a weak opening amid cautious sentiment, benchmark indices turned positive by midday as investors stepped in to accumulate frontline stocks at lower levels. The rebound was led by banking, IT, and oil & gas shares, while broader market sentiment also improved.
What Drove the Recovery
Market participants attributed the rebound to a combination of factors:
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Buying in heavyweights: Gains in index majors, particularly large private banks and select IT stocks, helped pull the benchmarks higher after recent declines.
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Stabilising global cues: Asian markets showed signs of stability, while US futures indicated a steady opening, easing fears of a sharp global sell-off.
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Short-covering: Traders said part of the upmove was driven by short-covering after the indices slipped in previous sessions.
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Supportive domestic outlook: Expectations of continued government capital expenditure and resilient domestic demand also underpinned sentiment.
Sectoral Performance
The Nifty Bank index outperformed, supported by buying in large lenders, while IT stocks gained on hopes of stable demand outlook and a pause in global rate-related concerns. FMCG and metals traded mixed, reflecting selective buying, while midcap and smallcap stocks recovered modestly after recent volatility.
Investor Caution Persists
Despite the rebound, analysts cautioned that markets remain in a consolidation phase, with investors closely tracking global interest rate signals, crude oil prices, and upcoming macroeconomic data. Sustained upside, they said, will depend on earnings visibility and clarity on global monetary policy.
Outlook
Market experts believe the return of the Nifty above 26,000 is psychologically significant, but advised investors to remain selective. “The recovery indicates strong domestic support, but volatility may persist in the near term,” a market strategist said.
For now, Tuesday’s session offered relief to investors, signaling that domestic equities continue to attract buying on dips, even as global uncertainties linger.