After a prolonged selloff and logging a one-year low last week, Indian stock indices showed a promising rebound on Monday, driven by value buying from investors. The Sensex closed at 80,081.30 points, gaining 679 points, while the Nifty surged by 186.55 points to close at 24,367.35. All Nifty sectoral indices moved into positive territory, with the PSU bank index leading the rally at a 3.8% gain.
Last week saw significant dips in Indian equities, with the Nifty 50 and Sensex shedding 2.7% and 2.2%, respectively. Additionally, the Nifty corrected by approximately 8.3% from its recent high, while mid-cap and small-cap indices faced steeper corrections of 9-10%. Foreign portfolio investors (FPIs) have also been net sellers throughout October, pulling out a substantial ₹85,790 crore, following four months of consistent inflows that previously supported the market’s bullish phase.
Market experts, however, indicate that geopolitical factors and macroeconomic uncertainties will continue to influence Indian equities in the near term. “The imminent U.S. presidential elections and associated uncertainty will continue to weigh on markets,” noted V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Nonetheless, positive developments, including strong quarterly results from banks and a decline in global oil prices due to anticipated ease in Middle East retaliations, have boosted investor sentiment. “The market rebound this week was supported by positive banking results and declining oil prices,” commented Vinod Nair, Head of Research at Geojit Financial Services. He added that the broader market’s stability would depend on stronger corporate earnings and companies with low leverage and solid growth prospects, which are expected to outperform when the market stabilises.
While global markets have remained steady in October, the MSCI India Index dropped around 8% from its late-September peak, signalling ongoing caution among investors, as observed by Jitendra Gohil, Chief Investment Strategist at Kotak Alternate Asset Managers.
