Sensex recovers 250 pts from day's low, Nifty above 25,250: 5 reasons behind market rebound

Sensex, Nifty rise in September 22 trade. 

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26 Aug, 2025 12:21

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The benchmark indices saw a sharp rebound in Monday’s trade after an early decline, as clarity on the US H-1B visa fee hike and GST rate cuts supported the investor sentiment.

Sensex opened lower and fell 475.16 points to 82,151.07. The Nifty declined 88.95 points to 25,238.10. However, by 11:30 am, the Sensex had trimmed losses to trade at 82,472.25, recovering more than 250 points from the day’s low, while the Nifty regained the 25,300 mark.

Adani Enterprises, Bajaj Auto, UltraTech Cement, Adani Ports and Special Economic Zone and Hero MotoCorp were among the major gainers, rising up to 3 percent.

Key factors behind the recovery:

1) Relief for IT shares: Shares of technology companies fell sharply in morning trade amid concerns over the steep hike in H-1B visa fees. Tech Mahindra slipped over 6 percent. However, White House Press Secretary Karoline Leavitt released a fact sheet on Saturday, clarifying key doubts on the new H-1B visa rules. Amid speculation on who exactly will be charged $100,000, Leavitt said, "This is not an annual fee" and that “this applies only to new visas, not renewals, and not current visa holders." The clarification eased concerns over business continuity.

"The market is likely to witness a dualistic behaviour today with the IT sector getting impacted by the H-1B visa issue and the domestic consumption themes responding to the potential big boost to consumption coming from the lower GST rates kicking in from today," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

2) GST rate cuts: From September 22, the GST Council’s new two-tier tax structure comes into effect, reducing rates on a wide range of goods and services. Items of mass consumption such as ghee, paneer, butter, dry fruits and ice cream, along with consumer durables like televisions, air conditioners and washing machines, have turned cheaper, boosting demand sentiment.

B Sumant, Executive Director, ITC Ltd, said "The GST rate rationalisation across various sectors will surely bring relief to consumers through enhanced affordability, boosting consumption, and strengthening investments, growth and employment. We have initiated an extensive exercise of informing all trade partners about the price revisions of our products across categories so that the commensurate benefits arising out of revised GST rates are passed on to the end consumer. Necessary steps are also being taken to notify consumers about the ensuing benefits."

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3) Global cues: Key Asian indices, including South Korea’s Kospi, Japan’s Nikkei 225 and Shanghai Composite, traded in positive territory. US markets ended higher on Friday, providing support to domestic equities.

4) FII buying: Foreign institutional investors bought equities worth Rs 390.74 crore on Friday, according to exchange data. The inflows lent support to the market.

5) Trade talks optimism: A delegation led by Commerce and Industry Minister Piyush Goyal is set to visit the United States on September 22 for discussions aimed at advancing the India-US trade deal. Hopes of progress in negotiations lifted investor mood.

Delegation led by Piyush Goyal to visit US for trade talks on September 22

Technical view

Anand James, Chief Market Strategist at Geojit Financial Services, said: "Last week’s achievement of the 25,400-25,600 objective, along with an evening star candle formation, prompts us to look for a pullback instead of extending upside objectives right away. Favoured rest point is 24,880-24,800. However, should slippages not stretch beyond the 25,200-25,000 region, we could see a sideways move followed by recovery attempts, though an outright penetration of 25,669 is less expected."

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.