Sensex surges 889 points, Nifty closes at 24,250 in market rebound

Markets stage strong recovery

Indian equity benchmarks bounced back sharply on Wednesday, snapping a recent losing streak. The BSE Sensex surged 889 points, while the NSE Nifty closed at the 24,250 mark.

Traders said buying emerged across most sectors, with banking, IT, and auto stocks leading the charge. The rebound comes after several sessions of decline that had eroded investor wealth.

What drove the rally

Market participants pointed to short-covering and value buying at lower levels. Global cues also turned supportive, with Asian markets trading higher during Indian trading hours.

Analysts said the bounce was technical in nature, as the Nifty had fallen to oversold levels in the previous sessions. The index had lost nearly 1,500 points in the preceding week.

Foreign portfolio investors remained net sellers, but domestic institutions stepped in to absorb the selling pressure. Provisional data showed strong buying by mutual funds and insurance companies.

Sectoral performance

The Nifty Bank index rose over 1.5%, recovering from recent losses. Private sector lenders and PSU banks both gained. HDFC Bank and ICICI Bank contributed significantly to the index move.

IT stocks also saw buying interest, with Infosys and TCS rising nearly 2% each. Auto stocks such as Maruti Suzuki and Tata Motors were among the top gainers in the Nifty50.

Broader markets outperformed the benchmarks. The BSE Midcap and Smallcap indices rose over 2%, indicating widespread participation.

Technical outlook

The Nifty has taken support near the 23,800 level and bounced back. Chartists said the index now faces resistance at 24,500. A sustained move above that could signal further upside.

Traders are watching global cues, especially the US Federal Reserve's interest rate decision due next week. Any dovish signals could boost emerging markets further.

Volatility remained elevated. The India VIX, a measure of market fear, eased slightly but stayed above 14.

Market breadth was positive. On the BSE, 2,300 stocks advanced while 1,100 declined. Over 350 stocks hit their upper circuit limits.

The rally comes ahead of the monthly derivatives expiry on Thursday. Rollover data will be closely watched for direction.

Investors will track corporate earnings for further cues. Several companies are scheduled to report quarterly results later this week.

All eyes now turn to global central bank meetings and domestic macroeconomic data for market direction in the coming days.