After weeks of relentless selling, Indian equities extended their recovery for a second straight session on Tuesday (October 6) as improving global cues and a retreat in Brent crude prices below the $100-a-barrel mark lifted sentiment.
The Nifty 50 closed 0.98% higher at 22,776, while the Sensex gained 0.95% to close at 73,067. The broader market outperformed the benchmark indices, with the Nifty Midcap 100 rising 1.08% and the Nifty Smallcap 100 gaining 1.56%.
"Crude oil prices slipped below the $100 mark after a large G7 stockpile release and alternative supplies through pipelines helped offset disruptions to vessel movements through the Strait of Hormuz,” said Vinod Nair, Head of Research, Geojit Investments Limited.
He added, “Coupled with strong Q2 business updates from financials and retail along with supportive global cues, the decline in oil prices improved investors' sentiment and supported a rebound from the oversold levels.”
Rupee, meanwhile, traded weak, down around 8 paise near 96.42, as continued FII selling pressure kept the currency under pressure despite a minor decline in crude prices.
The fresh recovery in the market comes after Indian equities last week extended their losing streak to an eighth consecutive week, the first such stretch since 2001, with the Sensex hitting a fresh 52-week low and the Nifty nearing the mark on Thursday (October 1) as elevated US 10-year Treasury yields and Brent crude above $100 a barrel intensified the sell-off.
Persistent FII selling added to the pressure, with foreign institutional investors (FIIs) selling (net sales) Rs 45536 crores of equities in September. On Monday, they offloaded (net sales) shares worth Rs 4700 crore.
Ajit Mishra, SVP – research, Religare Broking said that market participants will closely track the outcome of the RBI Monetary Policy Committee (MPC) meeting scheduled for Wednesday, along with its commentary, given the challenging macro backdrop marked by persistent West Asia tensions and the US Fed raising rates, signalling a shift towards tighter global monetary conditions.