Indian equity markets shrugged off global jitters and weak Asian cues on December 13, with Sensex and Nifty rebounding sharply from steep intraday losses, as value buying in beaten-down stocks led a recovery. The rebound came amid easing inflation and resilience in key sectors, though investors remain cautious ahead of next week’s US Federal Reserve policy meeting and domestic macroeconomic releases.
BSE Sensex surged 843 points or 1 percent to close at 82,133, while NSE Nifty gained 220 points to settle at 24,768. The indices recovered nearly 3 percent from lows earlier in the day, with the Nifty Midcap Index ending nearly flat on Friday.
Recovery driven by easing inflation; FMCG, IT, Bank stocks lead gains
Market recovery was led by gains in FMCG, IT, and banking stocks, supported by easing inflation and expectations of improving consumer demand during the festive season. FMCG stocks benefited from price hikes, a gradual correction in valuations, and optimism over a potential revival in consumer spending, said Vinod Nair, Head of Research at Geojit Financial Services.
Also read | Bharti Airtel clocks best week in three months on bullish Jefferies note, Hexacom shines too
Further, improving industrial production (IIP) growth along with easing inflation encouraged investors to buy into select sectors such as banking, IT and telecom, said Prashanth Tapse, Senior VP of Research at Mehta Equities.
Banking stocks, including heavyweights like ICICI Bank and HDFC Bank, saw robust gains, driving the Nifty Bank index up by 367 points to 53,584, after recovering more than 1,000 points from its intraday low. Analysts said that the sector remains a key beneficiary of easing inflation, with improving credit demand and stable asset quality boosting sentiment. IT stocks also joined the rally, aided by expectations of increased US spending, said Nair.
On the other hand, metal stocks remained under pressure due to uncertainty around China’s stimulus measures. The Nifty Metal index closed 0.7 percent lower, despite clawing back nearly 2 percent from its lows, as skepticism loomed over China’s economic revival.
Also read | Rate cut conundrum: Cooling India inflation meets firm US inflation, clouding investor hopes
Technical momentum signals comeback of bulls
Technical factors also played a significant role in today’s reversal. Friday’s low marked a key support level for the Nifty, which rallied from the neckline of an inverse head-and-shoulders pattern, signaling bullish momentum, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities. "The market action signals a strong comeback of bulls after recent choppy sessions, with the potential to test 25,200 levels next week," he added.
Now, with investors positioning themselves for upcoming macroeconomic cues, sector rotation is at play with stock-specific action driving recovery, said Siddhartha Khemka, Head of Research at Motilal Oswal Wealth Management. While technical indicators suggest the possibility of continued upside, experts said that the sentiment is expected to hinge on external cues and domestic data.
Cautious optimism; traders watchful of global volatility
As markets prepare for next week’s US Federal Reserve meeting and domestic WPI inflation and PMI data, traders remain watchful of global volatility and its potential ripple effects. “Investors should align their strategies accordingly, prioritising risk management to navigate market volatility effectively,” said Ajit Mishra, SVP - Research at Religare Broking, suggesting selective stock picking.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com 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!
