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The Indian stock market experienced a significant rebound, with both the Sensex and Nifty indices posting firm gains, effectively snapping a three-day losing streak. This recovery follows a sharp sell-off that occurred on April 7, which had resulted in a staggering loss of Rs 16 lakh crore in market capitalization. The broad-based nature of the rally was evident in the fact that all 13 sectoral indices witnessed an increase of approximately 2 percent, indicating widespread buying interest across various sectors of the market. At around 2:45 pm, the Sensex was trading at 74,373.55, up by 1,235.65 points or 1.69 percent, while the Nifty was at 22,570.60, up by 409.00 points or 1.85 percent. The market breadth was also positive, with 2841 shares advancing, 612 shares declining, and 89 shares remaining unchanged. The top gainers on the Nifty included Jio Financial Services, Shriram Finance, Titan Company, Adani Enterprises, and Eicher Motors, showcasing a diverse range of sectors contributing to the market's upward movement. The cooling down of India’s volatility index, India VIX, also known as the “fear gauge,” provided further support to the market sentiment. The index dropped by 9 percent to hover around the 20 mark, a significant decline compared to the previous day when it had surged by as much as 60 percent, reaching a five-year high. This decrease in volatility suggests that investors were becoming less fearful and more confident in the market's prospects, contributing to the rebound. However, despite the positive momentum, market experts advised investors to exercise caution in the short term, citing continued uncertainty stemming from tariff-related tensions and the potential for a global slowdown.
Several factors contributed to the recent market volatility and subsequent rebound. The primary concern driving the sell-off was the fear of a full-blown global trade war and its potential to trigger a recession in the global economy. Countries such as China, Canada, and the European Union have expressed their intention to impose retaliatory tariffs on American goods, creating uncertainty about whether a settlement can be reached before the next round of tariff hikes. This uncertainty has led to widespread nervousness among investors, prompting them to reduce their exposure to riskier assets. The battered Nifty IT index led the rebound, after suffering an 8 percent decline over the past five sessions. Tech majors such as TCS, Infosys, HCL Tech, and Wipro rose as much as 4 percent in the afternoon session, as the sector prepares to kick off its March-quarter earnings season in two days. The IT sector's recovery was significant, considering its importance to the Indian economy and its sensitivity to global economic conditions. Following the IT rally, strong gains were also observed in the Nifty Realty, Nifty Pharma, and Bank Nifty indices, which climbed up to 2 percent, reflecting broad-based buying across the market. The broader market, represented by mid and small cap 100 indices, also mirrored positive trends with gains of 2.3 percent each, indicating that the recovery was not limited to large-cap stocks. However, market experts cautioned that India is unlikely to remain immune to the global slowdown triggered by escalating tariff wars. Chetan Ahya, Chief Asia Economist at Morgan Stanley, stated that India could face a 40 to 50 basis point downside in GDP growth as a consequence of ongoing tariff tensions, highlighting the potential impact of global trade conflicts on the Indian economy.
In light of the current market conditions, investment strategies are being carefully considered. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, suggested that investors may continue in a wait-and-watch mode as it will take time for clarity to emerge. However, he also noted that India’s macros are stable and the country can grow at around 6 percent in FY26. Furthermore, he pointed out that valuations are fair, particularly in large caps, making them attractive to long-term investors. Based on these observations, he recommended that long-term investors can start nibbling at high-quality large caps like the leading financials. He also suggested that pharma stocks, which are attractively priced now, appear to be good buys, as Trump is unlikely to impose tariffs on pharmaceuticals at this stage. The government's decision to raise the price of household LPG and the special excise duty on petrol and diesel also had a positive impact on the market. Shares of oil marketing companies (OMCs) such as Hindustan Petroleum Corp., Bharat Petroleum Corp., and Indian Oil Corp. surged in trade, lifted by this decision. Oil companies are expected to recover around Rs 9,000 crore in FY26 through the Rs 50 hike in domestic LPG prices, which will offset the ongoing losses, according to sources. Shares of Info Edge, the parent company of job search platform Naukri.com, also surged nearly 5 percent after the company reported a 19 percent rise in standalone billings during the January-March quarter of financial year 2025. Additionally, the stocks of Electronics Manufacturing Services (EMS) firms in India rose about 9 percent amid reports of Apple planning to source more iPhones from India to the US to beat the tariffs imposed on China. Sameet Chavan of Angel One noted that the current market conditions appear quite troubling, as evidenced by the VIX spiking over 65 percent in just one day. He anticipates that 22,000-21,800 to serve as a cushion, helping to stabilize the market amid the heightened volatility. He also added that any breach below this specified support level, in conjunction with the 'Downward Sloping Channel' identified on the daily chart, could potentially allow for a decline towards 21750-21400 in the forthcoming period. Overall, the market rebound provides some relief after the recent sell-off, but investors are advised to remain cautious and monitor the global economic situation closely.
Source: Sensex up 1,200 pts, Nifty above 22,500 as all sectors rally; small, mid caps outperform