Sensex, Nifty gain on value buying after recent fall; global cues help

Broader markets outperform benchmarks

Benchmark indices Sensex and Nifty rose on May 10 after the previous session's plunge, as investors looked for value buying opportunities at lower levels.

"Following the significant sell-off witnessed in recent days, today's trend can be interpreted as value buying," said Amish Shah, Research Analyst at Taurus Corporate Advisory Services.

Also, according to a Bloomberg report, Citigroup Inc. strategists have downgraded China and upgraded India in emerging market allocation, potentially boosting investor sentiment towards India.

Speculation also mounted over expectations of rate cuts by the US Federal Reserve, fueled by the latest weekly jobless claims data. The easing of the 10-year benchmark US Treasury Yield to 4.45 percent overnight from 4.48 percent made equities appear more appealing to investors.

At close, the Sensex was up 260 points or 0.4 percent at 72,664 and the Nifty 50 was up 97 points or 0.4 percent at 22,055. About 2,035 shares advanced, 1,613 shares declined, and 138 shares remained unchanged.

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Ruchit Jain, citing technical indicators, noted, "Whenever indices hover around their support levels (21,900 being a crucial support for Nifty 50), and the RSI readings are technically 'Oversold,' we typically see a bounceback."

The broader market outperformed the benchmarks, with BSE Midcap and Smallcap indices rising by 0.8 percent each. However, Nifty IT emerged as one of the worst-hit sectoral indices. "The IT sector will face further selling pressure, which is likely to ease once the US Federal Reserve begins cutting interest rates," said Amish Shah.

Oil and gas, as well as FMCG stocks, led the gains. Railways, defense, PSU banks, FMCG, and automobile sectors are among those experts are betting on in the current market environment.

Despite market expectations for a one-sided victory for the NDA government, a lower voter turnout has raised doubts about the incumbent government's potential seat count in the general election. Consequently, volatility has increased, with the India VIX rising more than 2 percent to 18.6. Analysts anticipate volatility to subside once the uncertainty surrounding the elections dissipates.

The Street is now looking forward to forthcoming inflation data, due next week, for deeper insights into the US economic condition.

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