Mid-day Mood | Markets see biggest single-day jump in 2 months as Sensex soars over 1,000 pts, Nifty above 23,750

M&M, Tech Mahindra, Adani Ports, Trent, and Tata Motors were the top gainers on the Nifty.

Benchmark indices Nifty and Sensex surged the most in two months, extending early gains and building momentum throughout the afternoon, fueled by a broad-based rally that boosted investor sentiment. Market experts attribute the sharp rebound to the Nifty’s relative strength index, which had dipped below 30 in the past two sessions, signalling oversold conditions and paving the way for a strong pullback.

At noon, the Sensex was up 995.00 points or 1.29 percent at 78,334.01, and the Nifty was up 291.70 points or 1.24 percent at 23,745.50. About 2622 shares advanced, 693 shares declined, and 74 shares unchanged.

Follow our LIVE blog for all the latest market updates

"An important takeaway from the recent market trend is that a quick and sharp recovery is not in sight. The momentum that drove the market to its record peak of 26,216 in September is gone," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. He added that there can be recoveries but those are unlikely to be sustained 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," he added.

All 13 sectoral indices rallied in the afternoon with Nifty IT and Auto being the standout performers with gains of over 2 percent each. The IT index recouped all losses from yesterday when the sector fell over 2 percent. Notable gainers today included TCS, HCL Tech, and Infosys.

Read more: PSUs, Sensex firms see maximum erosion in investor wealth; BSE mcap plunges by nearly Rs 50 lakh crore

The auto index was also in the fast lane after heavyweights like M&M, Maruti Suzuki, Tata Motors, and Hyundai Motor India gained up to 3 percent. Other sectoral gainers were Nifty Bank, Energy, Infra, Realty, and Metal, all rising almost 2 percent each.

Four-wheeler major M&M rallied 4 percent to top the Nifty index in the afternoon after CLSA reiterated its 'outperform' rating, maintaining a target price of Rs 3,440. This indicates a potential upside of 16 percent from current levels. Insights from CLSA's engagement with M&M’s management revealed strong confidence in the automaker’s growth trajectory.

Read more: NTPC Green Energy IPO sees 55% retail subscription within 90 minutes on Day 1

Suzlon Energy darted up 5 percent to hit an upper circuit after Morgan Stanley's upgrade to an 'overweight' rating. The brokerage highlighted the stock's recent steep correction of 45 percent from its peak as a credible opportunity for accumulation, citing Suzlon’s strong business moat and its position as a key beneficiary of India's energy transition.

One stock that bucked the overall market trend was Honasa Consumer, the parent company of Mamaearth. The stock is down nearly 30 percent in two sessions after weak Q2FY25 results continued to weigh on investor sentiment. Honasa Consumer posted a net loss after five quarters of profit.

The broader market, comprising mid-small cap indices, outperformed the headline indices with gains of 1.7 and 1.8 percent, respectively. Despite the sharp bounce back, Vijayakumar suggests investors to not rush into grabbing these stocks as they have more downside potential. In contrast, quality largecaps are resilient and investors can stick to them, he added.

"Yesterday's attempt to rise was weak, leading the Nifty to close lower for the seventh straight day—the longest losing streak since the current decline started on September 27. However, there is still hope for a recovery, as indicators suggest the market may have reached its lowest point," Anand James of Geojit Financial Services, said. "For now, any gains are expected to stay within the range of 23,733 to 23,788, with further signals needed to aim for 24,111. On the other hand, if the index fails to stay above 23,565, the recovery could be delayed, though a major drop seems unlikely today," he added.

M&M, Tech Mahindra, Adani Ports, Trent, and Tata Motors were the top gainers on the Nifty. Laggards included SBI Life Insurance, HDFC Life Insurance, Bajaj Finserv, Shriram Finance, and SBI.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.