Indian stock indices returned to the green zone on Tuesday after trading lower for seven consecutive sessions. The rise can be partly attributed to value buying.
The Sensex closed at 77,578.38 points, gaining 239.38 points or 0.31 per cent, while the Nifty ended at 23,518.50 points, up 64.70 points or 0.28 per cent. Nifty auto, media, realty, and consumer durables sectors led the gains, while metal, PSU bank, and oil and gas sectors lagged, according to NSE data.
At one point during the session, both indices rose over 1 per cent before profit booking at higher levels pared gains.
“An important takeaway from the recent market trend is that a quick and sharp recovery is not in sight,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“There can be recoveries which are unlikely to sustain given the selling mode of the FIIs and the concerns surrounding the weak earnings growth feared in FY25. At best, the market may consolidate around the present levels with sideways movements. Sustained up moves will emerge only when incoming data indicates earnings recovery,” Vijayakumar explained.
He also highlighted a significant trend in the market: “A sustained weakness is emerging in a large number of mid and smallcaps. Hundreds of such stocks, which had run ahead of fundamentals and were driven by momentum, are reverting to mean. Investors need not rush in to grab these stocks which have more downside potential. In contrast, quality largecaps are resilient, and investors can stick to them.”
Until Monday, benchmark stock indices in India had been in a downward spiral, extending losses for the seventh straight session and touching new multi-month lows.
The continued decline was driven by multiple factors, including relatively weak Q2 earnings, sustained foreign fund outflows, and rising domestic inflation—both retail and wholesale.
