Indian benchmark stock indices, the Sensex and Nifty, recorded significant gains today, snapping losing streaks of four and five sessions respectively. The upturn was driven by a combination of positive global indicators, a decline in US bond yields, and robust buying activity from both foreign and domestic institutional investors.
Market Rebound Details
The Sensex climbed 554 points to close at 78,77,463, while the Nifty rose 128 points, reaching 24,210. This surge pushed the market capitalization of BSE-listed firms to Rs 488.70 lakh crore. Among the top performers on the Sensex were Bajaj Finance, Infosys, HCL Tech, Eternal, and TCS, with gains up to 1.88%. Mahindra & Mahindra (M&M) was the sole Sensex laggard, experiencing a slight decline of 0.10%.
Sector-wise, capital goods, metal, and information technology (IT) shares led the charge. The BSE IT index notably advanced 417 points to 29,601, contributing significantly to the overall market strength. However, the price of Brent crude oil, trading above the $91 per barrel mark at $91.94, continues to pose a potential risk to the sustained rally in Indian equities.
Key Drivers Behind the Rally
Several crucial factors converged to fuel today's market recovery:
- Falling US Bond Yields: US Treasury yields saw a sharp decline following the US Department of the Treasury's announcement to at least double its government debt buybacks. This move eased pressure on yields, with the benchmark 10-year note yield dropping to approximately 4.64–4.66% and the 30-year bond yield tumbling to near 5.19%. Such a decline is generally seen as a positive signal for global equity markets.
- Positive Asian Market Performance: Asian markets demonstrated strong gains, providing a favorable backdrop. South Korea's Kospi surged 6.18%, driven by a sharp rebound in technology stocks. Japan's Nikkei advanced 595 points, and Hong Kong's Hang Seng also recorded a gain of 1.15%.
- Renewed Institutional Investor Interest: Foreign Institutional Investors (FIIs) extended their buying streak for the second consecutive day, injecting Rs 407 crore into equities. Domestic Institutional Investors (DIIs) continued their robust support, investing Rs 3,973 crore for the seventh straight session, underscoring strong domestic confidence.
Expert Outlook
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, commented on the situation, stating, "The market, which has been steadily downtrending for the last 12 trading sessions, appears set for a short-term reversal now. The market is in oversold territory and a mild rally triggered by short-covering is likely."
Shrikant Chouhan, Head Equity Research at Kotak Securities, offered a cautious view: "We are of the view that the intraday market texture is weak, but one quick pullback rally is not ruled out if the market surpasses the 24,200/77400 resistance mark. Above that, we could expect a technical bounce back to the 24,300–24,350/77500-77800 levels." He also warned that selling pressure could accelerate below 24,000/76700.