Indian Markets Rally: A Fragile Recovery Amid Persistent Challenges

Indian stock markets soared on Tuesday, with Sensex and Nifty posting significant gains. The rise was attributed to global cues and an oversold market. Experts caution persistent challenges like FPI selling and economic concerns remain. If Nifty sustains above certain levels, a further rally is possible.

In a remarkable turnaround, the Indian stock markets experienced a significant surge on Tuesday morning, with the Sensex and Nifty registering gains of over 1.25 percent. The Nifty 50 surged over 300 points to touch 23,770, and the Sensex climbed more than 1,000 points to 78,410, driven by positive global cues and an oversold market condition.

Market analysts attributed the gains to favorable international signals and a previously oversold market, although they warned that underlying issues persist. Factors such as reduced yet ongoing foreign portfolio investor (FPI) selling, downgrades in corporate earnings projections, sluggish economic growth, and high real interest rates continue to pose challenges to sustained growth.

Ajay Bagga, a banking and market expert, observed that global cues and oversold conditions are boosting Indian markets by 1 to 1.5 percent. He stressed that the foundational issues impacting Indian equities are still present. Meanwhile, technical indicators suggest the potential for further advances. Akshay Chinchalkar from Axis Securities noted that if the Nifty closes above its lower Bollinger Band, it could spark further gains, but experts remain cautious about any long-term bullish momentum.

(With inputs from agencies.)