The Indian stock market experienced a notable rebound on Monday after a five-day streak of losses, primarily fueled by a strong performance from ICICI Bank following its positive quarterly earnings report. At around 11:28 AM, the BSE Sensex surged by 827.37 points, reaching 80,229.53, which translated to an increase of over ₹3 lakh crore in market capitalisation. Meanwhile, the Nifty50 index saw a rise of 225.30 points, bringing it to 24,406.10.
This recovery comes after both the Sensex and Nifty50 had dropped nearly 8% from their record highs in late September. The decline was attributed to a combination of sustained foreign outflows and weaker-than-expected corporate earnings, which had shifted investor focus towards Chinese markets, where they were attracted by government stimulus measures and lower stock valuations. The poor earnings reports had further eroded market sentiment, contributing to the selling pressure in recent weeks.
ICICI Bank was a standout performer on the Sensex, leading the charge alongside other significant gainers like Mahindra & Mahindra (M&M), JSW Steel, Adani Ports, IndusInd Bank, Nestle India, and Hindustan Unilever (HUL). However, not all financial stocks fared well; IDFC First Bank's shares dropped by 10% after it reported a substantial 73% year-on-year decline in profits, totaling ₹201 crore. On a brighter note, DLF shares surged over 4% thanks to robust second-quarter earnings driven by newly launched home sales.
The sector-wise performance showed that the Nifty PSU Bank index soared by 2%, with Bank of Baroda, State Bank of India (SBI), and Punjab National Bank (PNB) leading the gains. Additionally, indices for Nifty Financial Services, IT, Media, and Metals also opened higher, although mid- and small-cap indices remained relatively flat.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the market dynamics, indicating that the trend of a "flight to quality" among investors is likely to continue, especially given the solid financial performance of major banks like HDFC Bank and ICICI Bank, which are seen as fairly valued. He suggested that investors could take advantage of the polarized valuations present in the current market environment.
On the broader Asian market front, stocks also showed upward movement, with Japan’s Nikkei 225 index rising by 1.6% and South Korea’s Kospi gaining 0.6%. This increase was partly supported by a dip in the yen, amid ongoing political uncertainties in Japan.Â
In terms of commodities, oil prices fell by over $3 per barrel as Israel's recent military actions against Iran did not disrupt energy infrastructure, alleviating some of the regional tensions. Vijayakumar noted that the global market landscape could improve in light of the subdued Israeli strikes, which avoided hitting Iranian oil fields, leading to a significant drop in crude prices. However, he cautioned that the upcoming U.S. presidential elections and the uncertainty surrounding them will continue to exert pressure on markets.
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