Stock Market Snaps Losing Streak: Nifty Nears 24,000, Sensex Jumps 776 Points

Markets Rebound After Five-Day Slump

Indian equity benchmarks snapped a five-day losing streak on Monday, staging a strong recovery. The BSE Sensex surged 776 points, while the NSE Nifty 50 climbed closer to the psychologically important 24,000 mark. The rally brought some relief to investors after a week of persistent selling pressure.

Market breadth was positive, with advances outpacing declines on both the BSE and NSE. All sectoral indices ended in the green, led by gains in banking, metal, and auto stocks. The recovery was broad-based, with buying activity seen across large-cap, mid-cap, and small-cap segments.

What Drove the Rally

Traders attributed the sharp rebound to a combination of factors. Value buying emerged at lower levels after the recent correction, which had pulled the Nifty down from its record highs. Overseas cues were also supportive, with Asian and European markets trading higher on Monday.

Foreign institutional investors, who had been net sellers in the previous sessions, appeared to turn buyers. Provisional data from the exchanges showed that FIIs were net purchasers of Indian equities on Monday. Domestic institutional investors also supported the market with steady buying.

Banking and Auto Stocks Lead

Banking stocks were among the top gainers, with the Nifty Bank index rising over 1.5%. Heavyweights like HDFC Bank, ICICI Bank, and State Bank of India contributed significantly to the Sensex gains. Auto stocks also saw strong demand, driven by expectations of a pickup in sales volumes during the festive season.

Metal stocks extended their recent rally on the back of firm global commodity prices. The Nifty Metal index rose more than 2%, led by gains in Hindalco and Tata Steel. IT stocks, which had been under pressure in recent weeks, also recovered some lost ground.

Technical Outlook Remains Cautious

Despite Monday's sharp recovery, technical analysts remain cautious. The Nifty is still trading below its 10-day and 20-day moving averages, indicating that the short-term trend remains weak. A decisive close above the 24,200 level would be needed to confirm a reversal of the recent downtrend.

The market's ability to sustain the current momentum will depend on global cues and domestic macroeconomic data due later this week. Traders are also watching the trajectory of foreign fund flows and the movement of the rupee against the dollar.

Volatility, as measured by the India VIX, eased slightly on Monday but remained elevated, suggesting that traders expect sharp swings in the near term. Options data indicates that the 24,000 strike has emerged as a key support for the Nifty, while 24,300 is seen as immediate resistance.

Investors will watch for cues from the US Federal Reserve's policy meeting and corporate earnings reports in the coming days. The market's direction will likely be determined by how these events unfold.