Benchmark indices Sensex and Nifty have snapped last week's losing streak on Monday, buoyed by buying in financials, realty, and oil & gas shares.
Dalal Street was under pressure last week owing to continued foreign selling and a mixed bag corporate earnings. At the start of the Diwali week, benchmark indices were higher, with mid and smallcaps in tow. At around 12:45 PM, the Sensex was higher by approximately 1,000 points, or 1.26%, to 80,387.41, while the Nifty climbed by 257.20 points, or 1.07%, to 24,439.25.
Mid-day Mood: Sensex, Nifty rise as financial, energy lead; all sectors in the green
Likely Factors Explaining the Market Rebound
Possible Bargain Hunting: The recent correction in the mid and smallcap space from highs had meant that the indices were lower by 9.8% and 9.3% from their recent peaks, respectively. Though some investors may explore this rebound for opportunities, technical chartists have advised against making an early judgment on the extent of the fall.
Potential Pullback: Ruchit Jain, Lead Researcher at 5Paisa.com, said the recent FII selling in the cash segment and short positions in index futures had contributed to last week’s slide. However, FIIs partially covered these positions on Friday, hinting at a potential pullback this expiry week, with projected upward moves towards 24,470 and 24,700 on Nifty 50. Support levels were seen in the 24,000-23,800 range.
A Bloomberg News report indicated that the 14-day Relative Strength Index — a measure to assess overbought or oversold trend — had slipped below 30 first time in a year, a critical level for markets.
Broader Market Rebound: Positive sentiment extended beyond large-cap stocks, with the Nifty Midcap and Nifty Smallcap indices posting gains of 0.81 percent and 1.31 percent, respectively, in Monday’s trade.
Middle East Tensions Ease: Investor concerns around the Middle East conflict have softened after Israel’s limited attack on Iran over the weekend raised hopes for a potential regional peace, helping with a gap-up opening.
Egyptian President Abdel Fattah al-Sisi has proposed a two-day truce and a limited exchange of hostages in Gaza to work toward a “complete ceasefire” between Israel and Hamas, according to AFP.
The United Nations Security Council too is meeting on Monday to discuss Israel's attack on Iran.
Crude Cooloff: International prices seem to have stabilised, after Israel's air strikes over the weekend did not lead to any disruption of crude oil facilities inside Iran. Brent crude, which saw an 8 percent spike earlier this month amid Iran-Israel tensions, eased to $74.38 per barrel after reports of a limited retaliatory action from Israel, and talks of a potential ceasefire in Gaza.
ICICI Bank's Results Booster: Shares of the large private lender reached an intraday peak of Rs 1,305.90, rising over 4 percent, after ICICI Bank reported a 14.5 percent on year jump in standalone profit at Rs 11,746 crore for the quarter ending September 30. Bandhan Bank shares also surged over 9 percent following a 30 percent profit rise in Q2FY25, which further lifted the Nifty Private Bank Index by nearly a percent.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
