Indian equity benchmarks staged a sharp intraday recovery on Monday, ending marginally higher despite a volatile session. The 30-share BSE Sensex gained 47.01 points, or 0.06%, to settle at 77,616.40. Similarly, the NSE Nifty50 index edged up 4.10 points, or 0.02%, to close at 24,211.
Broader indices also saw slight gains, with the Nifty Midcap 100 inching up 0.01% and the Nifty Smallcap 100 rising 0.03%. The market's recovery was primarily driven by buying interest in information technology (IT) and select banking stocks.
Key Contributors to Market Gains
Among the top contributors to the Sensex's gains were major IT players like Infosys Ltd, Tata Consultancy Services (TCS), and HCLTechnologies Ltd. Financial institutions such as ICICI Bank Ltd and Kotak Mahindra Bank also played a significant role. Other notable contributors included NTPC Ltd, Tech Mahindra Ltd, Mahindra & Mahindra (M&M), and Power Grid Corporation of India Ltd.
Factors Influencing Volatility and Recovery
Ankur Punj, MD & Business Head at Equirus Wealth, noted that domestic benchmarks were highly volatile due to investor jitters following a sharp spike in crude oil prices, attributed to renewed conflict between the US and Iran. He cautioned that geopolitical tensions and macroeconomic uncertainty might sustain caution moving forward.
Ajit Mishra, SVP, Research at Religare Broking, echoed concerns over geopolitical tensions in the Middle East pushing Brent crude prices higher. However, he highlighted the resilience in the IT sector, coinciding with the start of the earnings season, and selective buying in heavyweight stocks across sectors as key drivers for the market's recovery from intraday lows.
Vinod Nair, Head of Research at Geojit Investments, pointed out a strong intraday recovery and a positive development in the Indian IT sector. Despite global market selling pressure due to concerns over an AI-led valuation bubble, the negative impact on Indian IT stocks has eased, with foreign institutional investor (FII) selling moderating, potentially supporting future fund flows into India.
Nair added that investor concerns over tensions in the Strait of Hormuz were largely overlooked, and a moderation in crude oil prices during the day provided additional comfort. The initial batch of Q1 earnings has also come in better than expected, suggesting less severe earnings downgrades and more reasonable Indian market valuations.
Technical Outlook for Nifty
From a technical standpoint, Nandish Shah, Deputy Vice-President at HDFC Securities, observed that Nifty found support near 24,029. Despite the strong rebound, the index remains within a consolidation phase. Shah indicated that the range of 24,300 on the upside and 24,000 on the downside remains crucial. A decisive breakout above 24,300 could lead to an up move towards 24,530, while a breakdown below 24,000 might retest the 23,800-support zone.