India’s benchmark indices Sensex and Nifty rebounded in early trade on Tuesday after four days of sharp decline amid value buying at lower levels and a largely firm Asian markets.
The 30-share BSE benchmark Sensex jumped 449.48 points to 76,779.49 in early trade. The NSE Nifty climbed 141.25 points to 23,227.20.
The BSE Sensex tanked 1,869.1 points or 2.39 per cent in the past four trading sessions.
Market analysts believe the market is slightly oversold, indicating the potential for a near-term rebound. However, such a recovery is unlikely to hold due to persistent headwinds, including 10-year US bond yields exceeding 4.7 percent, uncertainty surrounding Trump’s actions post-January 20, India’s economic slowdown, weak corporate earnings, and a sharp rise in crude prices
However, challenges such as robust US labour market data (NFP) and a rising dollar index remain, potentially undermining hopes of fewer Federal Reserve rate cuts in 2025. These factors have triggered substantial fund outflows from emerging markets, including India, intensifying pressure on the broader market. For now, market direction depends heavily on the ongoing earnings season, which, if underwhelming, could deepen the prevailing negative sentiment.
Mid- and small-caps witnessed a much-needed respite with gains of 1.7 percent and 1.5 percent, respectively. Aishvarya Dadheech, CIO and Founder of Fident Asset Management says that some pain could continue in the mid and small-cap segments, although the Nifty and large caps may be entering oversold territory. The broader market has had a terrible start to the new year, falling nearly 10 percent already.
Among sectoral indices, Nifty IT was the sole laggard with losses of over a percent. This comes following HCL Tech’s Q3 disappointed investors. PSU Bank index snapped its four-day losing streak to rocket nearly 2 percent led by the likes of SBI and Bank of Baroda. Nifty Realty, which crashed 6 percent yesterday, gained over 1 percent on January 14. Auto, Nifty Bank and Oil and Gas also gained 1 percent each.
HCL Tech shares plunged 5 percent after brokerages remained on the sidelines after industry major HCLTech’s Q3 earnings, though in line with expectations, failed to deliver upside triggers. While the management commentary over deal wins remained upbeat, the marginal revision in revenue growth guidance hinted at a weaker Q4 for HCLTech, leaving brokerages disappointed.