Indian stock markets rebounded strongly on Tuesday, with the Sensex and Nifty climbing over 1.25% in early trade. The Nifty 50 surged more than 300 points to reach 23,770, while the Sensex soared over 1,000 points to 78,410. Market analysts attributed this recovery to favorable global cues and an oversold market. However, they warned that underlying issues like continued albeit reduced foreign portfolio investor (FPI) selling, corporate earnings downgrades, slow economic growth, and high real interest rates remain.
Ajay Bagga, Banking and Market Expert, highlighted that the bounce is driven by a heavily oversold market and positive global indicators. Despite the rally, the fundamentals affecting Indian stocks have not changed. Analysts noted that technical indicators, including the possibility of a “Bollinger outside inside” signal, suggest potential for further gains. Akshay Chinchalkar of Axis Securities mentioned that if the Nifty closes above the lower Bollinger Band, it could set a new target near the 24,125 mark.
Despite this recovery, experts cautioned that it does not signal the beginning of a bullish trend. FPI selling is expected to persist, but domestic investors might find opportunities in stocks that have corrected sharply. The market sentiment could also be influenced by the results of the Maharashtra elections. Vijay Chopra, a market expert, noted that a close above 24,000 could indicate a more sustained upward movement, potentially initiating a year-end rally known as the “Santa rally.”
Overall, while there are positive signs, experts remain cautious about the sustainability of this rebound, given the ongoing macroeconomic challenges.
Original Story https://www.livemint.com/news/nifty-sensex-rallied-over-1-pc-fpis-still-selling-bounce-back-because-of-overselling-11731999340539.html
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