Benchmark stock market indices staged a modest recovery on the back of gains in banking and financial stocks, after shedding more than 600 points earlier in the day. The S&P BSE Sensex closed up by 57.65 points, settling at 75,996.86, while the NSE Nifty50 gained 30.25 points to end at 22,959.50. Although the market faced significant declines throughout the day, the final minutes of trading witnessed a strong push, especially from stocks in the financial sector, which helped offset some of the losses.
Vinod Nair, Head of Research at Geojit Financial Services, commented that the market’s near-term potential for a rebound is currently limited, citing several key factors. "Modest earnings growth in Q3 FY25, coupled with sustained selling by Foreign Institutional Investors (FIIs), is contributing to the market's overall stagnation. Additionally, a weakening rupee and a widening trade deficit are likely to heighten investor caution. While the broader indices have faced corrections, the current valuations remain unattractive for most investors," he noted. However, Nair also highlighted that there is a silver lining. "If there is an easing of trade uncertainties in the US, coupled with early signs of a recovery in discretionary spending, it could provide some support for the market in the short term."
Sector-wise, the pharma and metal sectors stood out as the top performers. Stocks in these industries benefitted from strong earnings reports and positive market sentiment, contributing significantly to the day’s overall market recovery. Conversely, the auto, media, and IT sectors lagged behind, pulling the markets lower during earlier trading hours. The IT sector, in particular, faced challenges due to a lack of strong earnings growth and concerns over slowing demand for tech services in the global economy.
Mr. Aditya Gaggar, Director of Progressive Shares, also offered an insightful perspective on the broader market trends. He noted that a substantial recovery had been observed in the Mid and Small-cap segments, with many of these stocks ending the day in the green. "For the third time in recent weeks, the Nifty index has successfully defended the 22,800 level, which has now been reinforced as a strong support level. The immediate resistance point lies at 23,100, and a breakout in either direction—either above or below these levels—will be crucial in establishing a more definitive market trend moving forward," he said. This technical analysis underlines the importance of these price levels as markers for potential market shifts in the near future.
Among the major gainers, Adani Enterprises saw a notable rise of 3.93%, as investor confidence in the company remained strong despite broader market pressures. Bajaj Finserv also performed well, gaining 2.65%, driven by positive sentiment in the financial sector. IndusInd Bank climbed by 2.53%, buoyed by strong banking performance and growth in loan portfolios. Power Grid Corporation gained 2.23%, supported by positive infrastructure outlooks. Adani Ports and Special Economic Zone rounded off the list of gainers, adding 2.11%, with the logistics and ports sector remaining a key driver of growth in India.
On the downside, Mahindra & Mahindra led the decliners with a drop of 3.45%, driven by concerns over its automotive sales and production challenges. Bharti Airtel fell by 2.36%, largely due to a decline in subscriber growth and rising competition in the telecom industry. Infosys slipped by 0.72%, reflecting weaker-than-expected earnings growth and market concerns over its future performance. Tata Consultancy Services (TCS) also experienced a minor dip of 0.68%, influenced by cautious outlooks in the IT sector. ICICI Bank saw a slight dip of 0.67%, as investors weighed the impacts of rising interest rates on the banking sector.
Looking ahead, VLA Ambala, Co-Founder of Stock Market Today, projected that the Nifty could find support between the levels of 22,740 and 22,600, which would provide a cushion against further declines in case of additional market volatility. Resistance is expected between 23,030 and 23,100, where the market may face upward pressure. "The next session will be critical for confirming whether the index can sustain its recent gains or if the bearish trend will resume," Ambala concluded, stressing the importance of the upcoming trading days in determining the market’s direction.
In summary, while the market has shown some resilience, it remains vulnerable to external pressures such as international trade uncertainty and domestic economic factors like the weak rupee and rising trade deficit. Investors are advised to stay cautious, closely monitor earnings reports, and watch key technical levels for signs of further market direction.
