Benchmark stock market indices in India experienced a solid rebound on Monday, with the broader market staging a recovery after initially opening in the red. This positive turnaround was primarily driven by strong performances across key sectors such as Information Technology (IT), real estate, and fast-moving consumer goods (FMCG), which helped lift investor sentiment throughout the day.
The S&P BSE Sensex posted a notable gain of 445.29 points, closing at 80,248.08, while the NSE Nifty50 index surged by 144.95 points to settle at 24,276.05. This recovery came despite earlier concerns about the country's economic outlook, particularly the slowdown in the Q2 growth rate. However, market participants seemed to look past the negative data and focused on more optimistic signs, such as the core sector output for October, which suggested potential economic recovery.
Vinod Nair, Head of Research at Geojit Financial Services, highlighted that although the slump in the Q2 growth rate was a concern, the market managed to maintain a positive bias, driven by the recovery in key sectors. He pointed out that the mid- and small-cap stocks had been particularly resilient and were showing signs of rebounding, helping to bolster overall market sentiment. At the same time, Nair indicated that investors remained cautiously optimistic ahead of the Reserve Bank of India's (RBI) monetary policy review later in the week. The risk of a potential GDP forecast cut remained on the horizon, and there were concerns about the impact of current inflation dynamics on the RBI's decision-making. However, he emphasized that the central bank was unlikely to opt for a rate cut in the short term, as inflationary pressures persisted. He also anticipated that the RBI would likely revise its growth projections for FY25 in a more realistic direction.
On the stock front, UltraTech Cement emerged as the top performer of the day, surging by 3.82%, followed by Apollo Hospitals, which saw a gain of 3.45%. Grasim Industries also had a strong day, advancing by 3.06%, while Shriram Finance posted an increase of 2.56%. Additionally, JSW Steel rounded off the list of top gainers with a 2.53% rise, reflecting the continued strength in sectors such as cement, healthcare, and finance.
On the other hand, there were several notable decliners in today's session. HDFC Life suffered the steepest fall, declining by 2.67%, while NTPC saw a drop of 1.46%. Cipla followed with a 1.36% loss, and Hindustan Unilever posted a smaller decline of 0.69%. These losses, however, were outweighed by the strong performances in other sectors, indicating that broader market sentiment remained positive despite a few setbacks.
Vaibhav Vidwani, a research analyst at Bonanza, noted that despite concerns about the Q2 GDP growth rate, which came in at 5.4% — well below the forecasted 6.8% — the market sentiment improved as the day progressed. Vidwani highlighted that the broader market, including mid and small-cap indices, showed resilience and even outperformed their large-cap counterparts, signaling that investor confidence was on the rise. Additionally, he mentioned that foreign institutional investor (FII) selling, which has been a concern in recent weeks, did not seem to have a major impact on the market during today's trading session.
The banking and financial services sectors demonstrated some strength in the market as well. Nifty Bank gained 0.10%, and Nifty Financial Services rose by 0.26%, with Nifty Financial Services 25/50 also showing a minor increase of 0.21%. However, Nifty FMCG posted a slight decline of 0.05%, reflecting the mixed performance in some of the consumer goods stocks.
Sectoral performance was diverse, with Nifty Auto rising by 0.99%, Nifty IT gaining 0.93%, and Nifty Media climbing by 1.02%. The Nifty Metal index posted a solid increase of 1.10%, and the Nifty Pharma index advanced by 0.94%. Additionally, Nifty Private Bank saw a modest increase of 0.20%, while Nifty Realty demonstrated the most impressive performance, surging by 3.04%, benefiting from positive investor sentiment toward the real estate sector.
The Nifty Healthcare index also demonstrated resilience, moving up by 1.30%, while Nifty Consumer Durables gained 2.08%, indicating a strong outlook for the consumer goods sector. Nifty Oil & Gas advanced by 0.31%, and Nifty Midsmall Healthcare rounded out the gains with a 1.41% rise, highlighting investor confidence in the healthcare and mid-cap stocks.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd., expressed optimism about the market’s ability to recover, noting that the index’s resilience amid weak macroeconomic data was promising. Mishra suggested that a decisive breakout above the 24,350 level could open the door for further gains, potentially pushing the Nifty50 index beyond the 24,700 mark. He stressed that IT and banking stocks were likely to remain key drivers of market growth in the coming sessions. Mishra also recommended a selective investment approach, focusing on fundamentally strong stocks that could provide value in a market environment marked by volatility.
In summary, the stock market’s recovery on Monday was broad-based, with gains across various sectors. While challenges such as slower GDP growth and ongoing inflationary concerns remain, the resilience shown by mid- and small-cap stocks, as well as the overall market sentiment, offers hope for further recovery. Investors are likely to remain cautious ahead of the RBI’s upcoming policy decision, but the market’s recovery indicates potential for growth in the coming weeks, especially in sectors such as IT, real estate, and banking.
