Indian stock market rebound; Benchmark Indices Recover Ground Optimism
The Indian stock market rebounded strongly on Friday after facing heavy selling pressure during Thursday’s trading session. The S&P BSE Sensex climbed 786.37 points, or 1%, to 79,830.11, while the NSE Nifty50 gained 232.25 points to reach 24,146.40 by 1:25 PM IST. Key sectors such as telecom, pharmaceuticals, and consumer goods fueled the recovery, alongside significant contributions from major stocks like Reliance Industries, Bharti Airtel, and L&T.
This recovery brought relief to investors following the volatility caused by Foreign Portfolio Investors (FPIs) selling equities worth ₹11,756 crore in the previous session. Analysts and market participants cited several factors that contributed to Friday’s rally and suggested cautious optimism in the coming days.
Key Factors Driving the Market Rebound
Improved Investor Sentiment
Despite mixed cues from Asian markets, domestic equities found support from stock-specific action and reports of the U.S. potentially relaxing export restrictions on China. This news buoyed Chinese markets, indirectly boosting sentiment in Indian equities.
Sectoral Performances
Telecom, pharmaceuticals, and consumer goods led the rally:
- Bharti Airtel: Gained 5.32% to ₹1,643.
- Sun Pharma: Advanced 3.48%.
- Cipla: Rose 2.92%.
Top gainers included L&T, M&M, Adani Ports, and Tata Consumer Products, each registering gains of up to 2%.
Expansion of NSE F&O Segment
In a significant development, NSE expanded its derivatives (F&O) segment, adding 45 stocks such as Indian Bank, LIC, Adani Green Energy, DMart, and Zomato. Analysts believe this expansion will drive stock-specific action as the December F&O series begins.
Banking Sector Stability
Sameet Chavan, Chief Analyst at Angel One, noted that the banking sector’s performance remains crucial in sustaining the recovery. The Nifty Banking Index witnessed gains, contributing to broader market stability.
Challenges and Market Outlook
Short-Term Uncertainty
Despite the rebound, market experts advised caution, citing ongoing volatility and significant FPI outflows. According to V.K. Vijayakumar of Geojit Financial Services, short-term investors employing a “buy on dips” strategy might face limited gains, whereas those with a medium-to-long-term outlook may benefit more.
Crucial Resistance Levels
The Nifty50 is expected to face resistance in the 24,050–24,150 zone. A breakout above 24,400 could reignite bullish momentum, while a failure to hold key levels may confirm a bearish trend.
FPI Outflows
The market continues to grapple with heavy FPI outflows. Analysts have highlighted this as a major factor contributing to heightened volatility, urging investors to adopt a wait-and-watch approach.
Sector-Wise Highlights
Telecom: Bharti Airtel emerged as the top gainer, surging over 5%, driven by optimism around its growth outlook.
Pharmaceuticals: Pharma stocks such as Sun Pharma and Cipla also contributed significantly to Friday’s rally, supported by strong demand in the sector.
Consumer Goods: Stocks like Tata Consumer Products saw gains of up to 2%, reflecting investor confidence in stable consumption trends.
Analysts’ Perspectives
- Nuvama Institutional Equities:
The market remains in a challenging phase, oscillating between 23,450 and 25,000. Analysts recommend monitoring a sustained move above 24,400 to confirm bullish momentum. - Prashanth Tapse, Mehta Equities:
The addition of 45 stocks to the F&O segment is likely to result in heightened stock-specific action, offering opportunities to astute investors. - Sameet Chavan, Angel One:
Banking stocks are pivotal for sustaining recovery, with midcap stocks also showing resilience.
Looking Ahead
While Friday’s rally has lifted spirits, market experts urge investors to tread carefully. Accumulating quality stocks in sectors like financials, IT, capital goods, and telecom may provide stability in portfolios, especially for medium-to-long-term investors.
With December’s F&O series now underway and significant developments in global markets, the Indian stock market is likely to remain volatile. Keeping a close eye on macroeconomic cues and stock-specific opportunities will be key for navigating the uncertainty.
This sharp rebound marks a crucial moment for Indian equities, reflecting resilience amid challenges. Whether the momentum sustains depends on how the market navigates critical resistance levels and external pressures in the days to come.
Persistent FPI Outflows Continue to Weigh on Stock Market
FPI outflows; Domestic Stock Market Face Persistent Selloff Challenge The Indian stock market is grappling with unrelenting foreign portfolio investor (FPI) outflows, as Thursday’s trading session witnessed a massive selloff of Rs 11,756.25 crore. According to data from the National Securities Depository Limited (NSDL), net FPI flows for the calendar year 2024 have turned negative, …
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