Indian Stock Market Rebounds Amid Value Buying Surge

Indian stock indices bounce back after a continuous sell-off, with Sensex and Nifty recording significant gains. Value buying by investors and improved bank performance drive the recovery, but challenges such as US elections and weak corporate earnings continue to loom large on market sentiments.

After a dip to its lowest in over a year last week, Indian stock indices experienced a resurgence on Monday, fueled by value buying from investors. The Sensex surged 679 points to close at 80,081.30, while Nifty ended at 24,367.35, marking an increase of 186.55 points.

Encouragingly, all sectoral indices of the Nifty were in positive territory, with public sector banks leading the charge with a 3.8% rise. Despite this recovery, the previous week saw Nifty 50 and Sensex declining 2.7% and 2.2%, respectively.

Geopolitical factors such as the upcoming US presidential elections contribute to ongoing market volatility, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Nifty's correction stands at approximately 8.3% from its recent peak, mirroring similar corrections in mid and small-cap indices.

Data from NSDL points out that foreign portfolio investors have offloaded Rs 85,790 crore in Indian stocks throughout October, countering four consecutive months of net buying that supported previous market rallies. Recent foreign fund outflows, coupled with subdued earnings in the July-September quarter, have exerted downward pressure on the market.

Amidst this backdrop, Vinod Nair, Head of Research at Geojit Financial Services, observed a market rebound propelled by positive bank results and lower oil prices. He emphasized the need for further evidence of earnings recovery, especially in the face of weak demand and margin strains. Nair expressed confidence that companies with strong balance sheets and growth potential are poised to outperform once stability returns.

While global equity markets, including emerging markets, maintained relative stability in October, Jitendra Gohil, Chief Investment Strategist at Kotak Alternate Asset Managers, noted significant pressure on the Indian market, evidenced by an 8% drop in the MSCI India Index since its late September peak.

(With inputs from agencies.)