Markets Make a Comeback, Sensex Rises Close to 1000 Points

Stock Market Updates: Benchmark indices— Sensex and Nifty— surged by more than a per cent during the morning trading session on Tuesday. All sectors were trading in the green territory with Nifty IT as the top-performing sectoral index.

From the BSE Sensex 30 pack, Mahindra and Mahindra, Titan, Adani Ports, Tech Mahindra and Tata Motors were among the top gainers. The only laggards were ICICI Bank, Tata Steel and Bajaj Finserv.

At 10:45 am, BSE Sensex was trading at 78,180 level, up by nearly 1.09 per cent or 841 points. Whereas, Nifty50 was hovering around 23,700 level, up by more than 256.70 points. As per analysts, a relief rally was long overdue.

"The Nifty ended lower yesterday, its seventh straight daily loss. The last time that happened was in February 2023, which led to a relief rally and historically looking at the last decade, such downstreaks have mostly led to the market rebounding over the next 5 days," said Akshay Chinchalkar, Head of Research at Axis Securities.

Short-term momentum is also deeply oversold with the current decline dropping below the regression channel drawn from the March 2023 lows, which means statistically speaking, a bounce is overdue, he further added.

However, there is a chance that markets might be entering in a consolidation zone as sustained recoveries seems unlikely as of now.

"There can be recoveries which are unlikely to sustain given the selling mode of the FIIs and the concerns surrounding the weak earnings growth feared in FY25. At best the market may consolidate around the  present levels with sideways movements. Sustained up moves will emerge only when incoming data indicates earnings recovery," said Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services.

While a massive FII (Foreign institutional investors) outflow was initially triggered by the entry of China's stimulus to give a push to the dragon economy, Trump's recent win in the US election has further exacerbated the sell-off. This is largely because investors are now shifting their money in US markets as a bull rally seems imminent owing to Trump's policy playbook.