Following six consecutive days of losses, Indian stock indices surged back into positive territory on Tuesday. Analysts attribute this recovery to a combination of bottom-fishing by investors and a boost in market sentiment driven by the Bharatiya Janata Party (BJP) heading for a third straight term in the Haryana assembly elections.
The Sensex closed at 81,634.81 points, gaining 584.81 points, or 0.72 percent, while the Nifty ended at 25,013.15 points, up 217.40 points, or 0.88 percent. All sectoral indices posted gains, with the notable exception of Nifty Metal. Nifty Media, Auto, Pharma, and Oil & Gas emerged as top performers for the day.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted a shift in investor strategy amid the market recovery. “Traders should consider using this recovery to lighten positions and remain selective for long trades. We continue to favor IT and pharma stocks for their resilience and recommend careful stock selection in other sectors,” Mishra said.
The recent string of losses, spanning six sessions, saw the Sensex and Nifty plummet by 4 to 5 percent. Market watchers attributed the dip to a correction phase following a recent bullish run, exacerbated by geopolitical tensions in the Middle East, particularly following a fresh wave of violence between Israel and Iran.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted a cautious approach for investors navigating the current market landscape. “The best strategy now is to accumulate high-quality, fairly valued bluechips like the leading financials and IT stocks,” Vijayakumar advised.
Despite the recent downturn, Indian stocks had previously benefited from the U.S. Federal Reserve’s decision to lower interest rates by a steep 50 basis points, a move that has been supporting capital inflows into emerging markets like India. Foreign portfolio investors (FPIs), who have been net buyers for four consecutive months, continued to offer some support to the Indian markets through September.
Looking ahead, investors are focused on upcoming policy announcements and corporate earnings reports. The Reserve Bank of India’s (RBI) monetary policy outcome on Wednesday is expected to provide additional market cues. The RBI has maintained the repo rate at 6.5 percent for nine consecutive meetings, a policy stance that is closely watched by both domestic and international investors.
As the market gears up for the release of India Inc.’s second-quarter earnings, analysts suggest that investor sentiment may further stabilise if results meet or exceed expectations. The BJP's continued strength in Haryana has lent a boost to market confidence, signaling political stability and continuity that many view as favorable for India’s economic trajectory.
(With inputs from agencies)
