Market stages strong rebound as Nifty, Sensex end 1% higher; IT, autos, metals drive gains

The market breadth tilted heavily in favour of gainers

Marking an end to the downslide in the market, benchmark indices--the Nifty 50 and Sensex, staged a strong rebound from the oversold territory, closing the session on March 5 with around 1 percent gains. With this, the Nifty 50 also looks set to snap its 10-day losing run, a first in history.

Information technology, metal, and automobile stocks were the engines that drove the upmove, outweighing losses in select index heavyweights. Having said that, analysts remain skeptical about the sustainability of this recovery, as uncertainty continues to cloud global financial markets amid lingering concerns over trade wars.

At close, the Sensex surged 740.30 points, or 1.01 percent, to settle at 73,730.23, while the Nifty climbed 254.65 points, or 1.15 percent, to end at 22,337.30. Market breadth remained tilted in favour of gainers as 3,116 stocks rose, 734 fell, and 85 were unchanged.

Regardless, Kranthi Bathini, Director at WealthMills Securities, has cautioned investors against interpreting this rebound as a market bottom, stating that sentiment is unlikely to make a stark shift unless the Nifty climbs above 23,000.

Structurally, Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates  pointed out that the 100-Weekly Simple Moving Average (100-WSMA) for Nifty is placed near 21,900 levels, and multiple support zones sit near 21,800 levels. He believes the possibility of a short-term pullback towards 22,500 remains sustainable till index holds the support of 21,800. However, on the higher side, Yedve sees 22,500 as an immediate resistance for the index.

Global markets have been rattled by sweeping tariffs imposed by US President Donald Trump, triggering retaliatory measures and stoking fears of a multi-front global trade war.

On Tuesday, the US officially implemented a 25 percent tariff on imports from Canada and Mexico, while Chinese goods now face a total duty of 20 percent following an additional 10 percent levy. In response, both China and Canada have announced reciprocal tariffs on US imports. Further escalating tensions, Trump has threatened additional retaliatory tariffs starting April 2, drawing attention to India and raising concerns over potential trade disruptions and market volatility.

Follow our live blog for all the market action

Beyond the immediate trade impact, these tariffs could drive up inflation in the US, potentially prompting the Federal Reserve to keep interest rates elevated for an extended period, a move that may curb foreign investment in emerging markets like India.

Despite global uncertainties, broader markets staged a strong rebound, with the BSE Midcap and BSE Smallcap indices surging over 2 percent each. All 13 major sectoral indices traded in the green, led by Nifty Auto, Nifty IT, Nifty Energy, Nifty Metal, Nifty PSU Banks, and Nifty Realty, each rising 2-4 percent.

Among Nifty 50 constituents, Adani Ports, Tata Steel, M&M, and Adani Enterprises led the charge, climbing 4-5 percent. On the other hand, Bajaj Finance, HDFC Bank, and ICICI Bank emerged as the top laggards, slipping 1-3 percent.

Shares of BSE Ltd plunged 3.5 percent after rival National Stock Exchange (NSE) announced a shift in the expiry day for all futures and options (F&O) contracts. Starting April 4, Nifty index weekly F&O contracts will now expire on Mondays instead of Thursdays. Additionally, all Nifty F&O contracts will now expire on the last Monday of the expiry month, rather than Thursday, according to the exchange.

Meanwhile, IT firm Coforge saw its shares soar over 8 percent after announcing two acquisitions, a major long-term deal, and a stock split. The company secured a 13-year, $1.56 billion agreement with US-based travel technology firm Sabre Technologies to enhance product delivery and develop AI-driven solutions. Coforge stated that this partnership reinforces its role in accelerating Sabre’s innovation, focusing on speed and scalability in AI-powered product development.

Looking ahead though, several analysts are hoping to see the market bottoming out in the near couple of weeks, especially after the heavy beating seen in February. Manish Goel, Founder and MD of Equentis Wealth Advisory Services, believes that markets are entering a phase of renewed traction, driven by improving GDP growth, earnings recovery, and better liquidity conditions

"With government spending and capex back on track after a temporary slowdown, the stage is set for stronger growth in the coming quarters. Corporate earnings appear to have bottomed out, with markets already factoring in downward EPS revisions. The worst may be behind us, as earnings are expected to grow at 15 percent in FY26 and 14 percent in FY27," Goel added.

He further feels that the Nifty's most reasonable valuation in nearly three years, also presents a compelling case for medium-term upside. "As liquidity conditions improve and investor confidence returns, markets could make a comeback toward the 25,000–26,000 range over the next two to three quarters," he said.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and do not reflect the opinions of the website or its management. Moneycontrol.com advises users to consult certified experts before making any investment decisions.