NEW DELHI: India's equity market experienced a sharp rally on Tuesday, driven by positive global cues and value buying, with both the BSE Sensex and NSE Nifty recording their largest single-day gains in nearly two months. The Sensex surged by 1,131.31 points (1.53%) to close at 75,301, while the Nifty50 rose by 325.55 points (1.45%) to end at 22,834.3. This followed a modest gain of about 0.50% in both benchmarks on Monday.
Investor wealth increased by approximately ₹7 lakh crore, reaching Rs400 lakh crore on Tuesday, up from Rs 393 lakh crore in the previous session.
Sundar Kewat, Technical and Derivatives Analyst at Ashika Stock Broking, attributed the rally to optimistic global market trends. He noted that softer-than-expected U.S. retail sales data had fueled expectations of potential interest rate cuts by the Federal Reserve later in the year. A key highlight was the Nifty breaking a three-week high, signaling strength in the index, he added.
All sectoral indices ended in positive territory, with auto, capital goods, consumer durables, metal, power, realty, and media indices gaining between 2-3%. In the broader market, the BSE Midcap and Smallcap indices also rose by more than 2% each.
The top gainers in the Nifty50 on Tuesday were ICICI Bank, M&M, Shriram Finance, L&T, and Tata Motors while Bajaj Finserv, Bharti Airtel, and Tech Mahindra were among the losers.
Prashanth Tapse, Senior VP (Research) at Mehta Equities noted that the market had been in a bearish phase over the past few weeks, making valuations more attractive. Investors took advantage of the opportunity to invest in beaten-down sectors.
However, he cautioned that the recovery might be difficult to sustain due to global challenges, including fears of slowing domestic growth and potential tariffs imposed by the U.S. on key economies like India.
An escalating global trade war ever since U.S. President Donald Trump announced increasing tariffs on imports has led to increased volatility in the global equity market. Add to this, a relentless selling by foreign institutional investors (FIIs) and weak corporate earnings growth weighed on Indian equities with the benchmarks plummeting more than 12% since September peaks.
Market participants will closely monitor the outcome of the upcoming FED and BOJ meetings in tomorrow's session. Bajaj Broking said that Tuesday's session was firmly in bullish control, with the index opening strong and progressively building on its gains to close higher. A robust bullish candle signaled a decisive range breakout, marking a shift in momentum in favor of the bulls, it added.