Equity benchmarks reversed early declines on Tuesday, staging a strong rebound by midday on the weekly derivatives expiry. The Sensex, which had dropped 392.59 points to an intraday low of 84,558.36, recovered more than 300 points to trade at 84,865.41 around 1:30 p.m. The Nifty also slipped below 25,900 in the morning, touching 25,877.10, before bouncing back to 25,972.60.
Key drivers of the recovery included:
- Value buying: Investors stepped in after the initial fall, particularly in banking and financial stocks, helping lift the indices.
- FII inflows: Foreign Institutional Investors purchased ₹442.17 crore worth of equities on Monday after five sessions of selling, improving sentiment.
- Shift away from AI-heavy trades: As the global AI rally cools, funds are rotating into broader emerging markets like India, supporting domestic equities.
Geojit’s Dr. V K Vijayakumar noted three supportive factors: progress on a potential India–US trade deal, the cooling AI trade benefiting India, and improving fundamentals reflected in growth and earnings. He added that sustained consumption will be crucial.
- Trade deal optimism: Hopes for an India–US Bilateral Trade Agreement strengthened after White House adviser Kevin Hassett said negotiations were nearing completion.
- Crude price ease: Brent crude slipped 0.47% to USD 63.90 per barrel.
Technically, analysts expect Nifty to remain range-bound, with potential dips before an upward attempt.