Indian stocks bounce back: Nifty gains 1.5% from day's low

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,329.79 crore on Monday.

Indian stocks posted a strong recovery on November 5, buoyed by fag end buying in banking, metal and other key sectors. Market sentiment was lifted by hopes of a consumption revival in the second half of the financial year, while metal stocks saw robust gains on anticipation of a major stimulus from China expected later this week.

The BSE Sensex jumped 694.39 points or 0.88 per cent to settle at 79,476.63. During the day, it soared 740.89 points or 0.94 per cent to 79,523.13. The NSE Nifty climbed 217.95 points or 0.91 per cent to 24,213.30.

Vinod Nair, Head of Research, Geojit Financial Services said "the recent rebound in domestic manufacturing activity data, along with the expected revival of consumption in the H2, are likely to support market sentiment. Metals led the gains, driven by the anticipation of significant stimulus from China later this week."

The benchmark indices had declined in the morning trade today amid constant foreign fund outflows and cautious investors’ sentiment ahead of the US presidential elections outcome and the Federal Reserve interest rate decision. Sensex hit a low of 78,296.70, while Nifty touched 23,842.75.

All eyes are on the US Presidential elections, and equity markets globally are seeing heightened volatility because of the uncertainty surrounding the poll outcome. The impact of the uncertainty can be gauged from the fact that the Indian benchmark Sensex fell as much as 1,500 points during intra-day trading on November 4.

While the poll outcome is uncertain, Sheetal Malpani, Chief Investment Officer and Head of Equity at Tamohara said that some capital is moving back to the US as the dollar strengthens on hopes of a Trump victory.

Foreign investors pulled out a massive Rs 94,000 crore from the Indian stock market in October, making it the worst-ever month in terms of outflows. In November, the trend remains unabated, with FIIs offloading equities worth Rs 4,329.79 crore on Monday.

Analysts view US Presidential candidate Donald Trump’s stance on tariffs as a significant challenge for emerging markets. While China is likely to be Trump’s primary target, India could also feel the impact. His hardline approach to import tariffs and corporate tax cuts may benefit US markets in the short term but could pressure emerging economies.

Donald Trump banned high-tech exports to China during his 2017-2021 presidency, citing unfair trade practices and national security.

The BSE benchmark tumbled 941.88 points or 1.18 percent to settle at 78,782.24 on Monday, the lowest closing level since August 6. The Nifty tanked 309 points or 1.27 percent to 23,995.35.