Indian Stock Market Rebounds Amid Investor Optimism and Global Stability

After hitting a year-long low, Indian stock indices soared on Monday, driven by value buying. The Sensex rose by 679 points while the Nifty increased by 186.55 points. All Nifty sectoral indices recorded gains with PSU banks taking the lead. The market faces uncertainty due to upcoming US elections.

The Indian stock market witnessed a resurgence on Monday after touching a year-long low in the previous week, largely propelled by value buying from investors. The benchmark Sensex climbed 679 points to close at 80,081.30 points, while the Nifty recorded an upward movement, settling at 24,367.35 points, up by 186.55 points.

All sectoral indices under the Nifty umbrella were in the positive, with the PSU bank sector making a significant leap of 3.8 percent. Preceding this rise, Nifty 50 and Sensex experienced declines of 2.7 percent and 2.2 percent last week.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, 'The looming US presidential elections add a layer of uncertainty in the market.' Notably, Nifty saw a correction of about 8.3 percent from its recent peak, whereas mid and small-cap indices corrected between 9 to 10 percent.

October has been challenging for Indian equities, with foreign portfolio investors withdrawing Rs 85,790 crore, yet this month still has a few sessions left, according to NSDL data. The withdrawal comes after four months of FPI buying, which had fueled recent bullish trends in the market. Recent exits of foreign funds, combined with subdued earnings from Indian corporations for the July-September quarter, placed additional strain on stock indices.

Despite last week's selloff, Monday's bounce back was spurred by positive banking sector results and lowered oil prices in response to anticipated de-escalations in the Middle East, said Vinod Nair, Head of Research at Geojit Financial Services. Nair emphasized that 'the stability of the broad-based rally is contingent on earning results, which currently grapple with weak demand and margin pressure. Companies with less leverage and promising growth are expected to fare better as stability returns.'

Meanwhile, global equity markets, including emerging markets, have maintained stability throughout October. However, the Indian market experienced notable pressure, with the MSCI India Index decreasing by approximately 8 percent since its peak in late September, noted Jitendra Gohil, Chief Investment Strategist at Kotak Alternate Asset Managers. (ANI)

(With inputs from agencies.)