Sensex recovers 450 pts from day's low, Nifty near 24,900: 7 key reasons behind market rebound

Sensex, Nifty rebounded in trade on Wednesday amid positive global cues. 

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The benchmark indices rebounded sharply in Tuesday's trade, erasing early losses triggered by profit booking at higher levels. The Sensex jumped 450 points from its day’s low to trade at around 81,735.28, while the broader Nifty moved closer to the key 24,900 mark, underlining a strong comeback in investor sentiment.

The market saw strong buying in IndusInd Bank, Trent, Adani Ports, Adani Enterprises and Bharat Electronics — each gaining around 3 percent — as broader cues turned favourable.

Here are the key reasons that drove the recovery on Dalal Street:

1. Global Markets Rally: Positive global cues helped lift investor mood after Wall Street Futures surged over 1 percent overnight. The rally followed news that US President Donald Trump has postponed the proposed 50 percent tariffs on EU goods until July 9.

2. US-EU Trade Optimism: Comments from European Union Trade Commissioner Maros Sefcovic reinforced hopes of a breakthrough in the ongoing trade dispute. He said the EU remains “fully committed” to finding a solution with the US.

3. FII Buying Continues: Foreign institutional investors (FIIs) remained net buyers in the Indian equity market, picking up stocks worth Rs 135.98 crore on Monday. Steady foreign inflows have been providing support to domestic markets in recent sessions.

4. India-US Trade Talks Gain Pace: Bilateral trade negotiations between India and the United States are showing progress. According to PTI, a US delegation is expected to visit New Delhi soon to push for an interim deal ahead of the July 9 deadline. India is pressing for complete exemption from the 26 percent reciprocal tariff imposed by Washington on select Indian exports.

5. Strong Monsoon Start: The southwest monsoon has advanced into Kerala nearly eight days ahead of schedule — the earliest in 16 years — and has now spread across several states. The India Meteorological Department (IMD) has issued alerts for heavy rainfall in regions including Delhi, Maharashtra, Karnataka, and Kerala. The early onset is seen as a positive for the rural economy, particularly the kharif sowing season.

6. Rate Cut Expectations Build Up: Expectations of a rate cut in the upcoming Reserve Bank of India (RBI) policy review on June 6 further boosted sentiment. A Moneycontrol poll showed that most economists and treasury heads anticipate a 25-basis-point cut in the repo rate — which would be the third consecutive reduction this year.

7. Technical Rebound: Market analysts pointed to a technical breakout on the charts as a trigger for the afternoon surge. "The Nifty has managed to decisively break out of its consolidation zone of 24,500–25,000," said Devarsh Vakil, Head of Prime Research at HDFC Securities. He noted that the index now faces resistance at 25,207, while support is seen around 24,800.

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.