After three sessions of deep cuts, benchmark indices rebounded on Monday as investors sought do some value buying in large caps that were beaten down heavily in the recent past. Though Brent crude prices surged to $106.5 per barrel, both Sensex and Nifty recovered from day’s lows to close in the green.
Amid extreme volatility, the Sensex fell 614.16 points or 0.82% to hit a day’s low of 73,949.76 in early trade. However, in late trade it bounced back, gaining 1,553.09 points or 2.10% from the day’s low, led by buying in index heavyweights from the banking and auto sectors. It finally rose 939.93 points or 1.26% from the previous close to end at 75,502.85.
The Nifty also recovered its initial loss of 196 points (0.85%) and surged 453.55 points (1.98%) from the day’s low. It closed at 23,408.80, up 257.70 points or 1.11% from its previous close.
What do researchers say?
“The equity market staged a late-session rebound, supported by value buying in domestically oriented sectors such as auto, banking and FMCG, triggering a relief rally after the recent sell-off,” said Vinod Nair, Head of Research, Geojit Investments.
The rebound largely reflects participants taking advantage of lower levels to accumulate select large-cap stocks after the sharp decline, said Ajit Mishra, SVP – Research at Religare Broking.
However, the overall mood remained cautious amid persistent geopolitical tensions in the Middle East and elevated crude oil prices, which continue to raise concerns over inflation and India’s import bill, Mishra added.
Continues FII outflows
In addition, continued foreign institutional investor outflows and currency volatility are keeping risk appetite in check, he said.
Foreign portfolio investors (FPIs) have offloaded shares worth $7.3 billion (Rs 67,429.13 crore) since the war began on February 28, including $1 billion (Rs 9,365.52 crore) on Monday alone, as per provisional data.
In contrast, domestic institutional investors (DIIs) bought shares worth Rs 12,593.36 crore on Monday, the highest since October 7, 2024. So far in March, their total buying has reached Rs 83,120.06 crore.
The India VIX Index fell 4.60% to 21.60, indicating a slight cooling in market volatility.
The overall market breadth remained negative, with 2,860 losers against 1,509 gainers on the BSE. Underperforming the benchmarks, the broader Nifty Midcap 100 fell 0.27% and the Nifty Smallcap 100 declined 0.53%.
Investor wealth increased by Rs 75,469 crore to Rs 430.57 lakh crore.
HDFC Bank and ICICI Bank together contributed 416 points, or 44.3%, to the Sensex’s 939-point rally, while Reliance Industries, SBI and M&M together added 216 points, or 23%.
On the sectoral front, auto, banks, financial services and FMCG were the top gainers, while oil & gas, realty, healthcare and pharma emerged as the top losers.
UltraTech Cement, Trent, HDFC Bank, M&M and Eternal were the top Sensex gainers, rising by up to 4.22%, while BEL, Sun Pharma, Power Grid, Bharti Airtel and NTPC were the top laggards, declining by up to 2.32%.