Does today's partial recovery suggest market made a short-term bottom? Check what analysts say

Does today's partial recovery from day's low suggest market made a short-term bottom? Check what analysts say

• Sensex and Nifty rebounded after a sharp gap-down opening.
• Volatility surged amid rising crude prices and Iran war tensions.
• Nifty must hold 23,700 for further pullback; caution advised.

Did our AI summary help?

Benchmark indices Sensex and Nifty posted partial recovery on March 9 after a massive gap-down opening that was triggered by a surge in crude oil prices.

Sensex rose 1,100 points from day's low while Nifty reclaimed the 24,000-mark after both the indices fell over 3% at open. The partial market rebound was triggered by the swift recovery in crude oil prices.

Earlier in the day, oil prices jumped as much as 28.9% to their highest since mid-2022 as the Iran war dragged on and Tehran named Mojtaba Khamenei as successor to his father, Ali Khamenei, in a move seen as a direct rebuke to US President Donald Trump.

The BSE Sensex shed 1.71% to an 11-month low of 77,566.16, settling very close to confirming a correction from its record closing high in December last year. The benchmarks have fallen about 4.6% since the start of the Iran war.

Nifty 50 index slid 1.73% to a 10-month closing low of 24,028.05 with a volatility measure surging to a 21-month high.

However, Sensex closed 1,352.74 points or 1.71% higher at 77,566.16, and the Nifty was down 422.40 points or 1.73% at 24,028.05. About 919 shares advanced, 3,246 shares declined, and 166 shares were unchanged.

Does this partial recovery mean markets have made a short-term bottom?

One brokerage said as long as Nifty holds 23,700 a move towards 24,400-24,500 is quite possible.

"Nifty has formed a bullish candle with a lower high and a lower low and a bearish gap above its head (24415-24078) signaling a partial pullback after a gap down opening. Overall bias continues to remain down. Volatility is likely to remain elevated amid uncertain global cues, rising crude oil prices and escalating geo-political tension. Index on Monday’s session rebounded after testing the key support area around 23,700-24,000 being the confluence of the 100 weeks EMA which has historically acted as key support and the trendline joining the lows of CY23 and CY25.

"Going ahead index holding above the support of 23,700 will signal a pullback towards 24,400-24,500 levels in the coming sessions. Failure to do so will lead to extension of the decline towards 23400-23,200 levels," said Bajaj Broking.

The current market texture is weak but oversold, said an analyst.

"On daily and intraday charts, the market is holding a lower top formation, which indicates further weakness from the current levels. We are of the view that the current market texture is weak but oversold. For day traders, 24,000-23,900/77,500-77,200 would act as key support zones. Above this, we could see an extension of the pullback move till 24,150-24,300/78,000-78,200. On the flip side, below 23,900/77,200, the selling pressure is likely to accelerate. If the market falls below this level, it could retest 23,700/76,500. Further downside may also continue, potentially dragging the index to 23,500/76,000," said Shrikant Chouhan, Head Equity Research, Kotak Securities.

"The next immediate support is placed around 23,500, followed by the 23,200 zone. On the upside, any recovery towards the 24,000–24,300 band is likely to face stiff resistance. Considering the prevailing scenario and scheduled weekly expiry, we maintain a cautious stance. We recommend staying selective while focusing on strict risk management until market stability returns," said Ajit Mishra – SVP, Research, Religare Broking Ltd.