Sensex recovers 300 pts from day’s low, Nifty near 25,150: Three key reasons for markets paring losses

Sensex, Nifty see some recovery after last hour of buying.

The benchmark equity indices pared some of losses on Tuesday as late-session buying in select IT counters, optimism around India–US trade discussions and firm cues from global markets helped lift sentiment.

At 3:15 p.m., the Sensex was down 296.91 points, or 0.36 percent, at 82,030.13. The Nifty slipped 76.45 points, or 0.3 percent, to 25,143.40. Both indices had earlier fallen more sharply before recovering nearly 300 points from the day’s low.

Key factors behind recovery

1) RBI rate cut expectations: Investor sentiment was supported by expectations of a rate cut in the upcoming Monetary Policy Committee (MPC) meeting after retail inflation eased to an over eight-year low of 1.54 per cent in September. The decline, driven by lower prices of vegetables, fruits, and pulses, brought inflation below the Reserve Bank’s comfort zone, as per government data released on Monday.

2) India–US trade talks: Hopes of progress in trade discussions between India and the United States also aided market recovery. New Delhi is expected to hold talks with Washington this week and has pledged to increase imports of US energy and gas to address concerns over its purchases of Russian oil, according to a Reuters report citing an official.

3) Expiry-linked volatility: Markets remained volatile due to the Nifty expiry, with traders unwinding positions in the derivatives segment. Such expiry-linked adjustments typically lead to heightened intraday fluctuations.

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