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Markets snap 4-day losing streak; domestic investors help halt the slide

The total market capitalisation of BSE-listed firms rose by Rs 6 trillion to Rs 423 trillion

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Sundar Sethuraman Mumbai

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Benchmark indices Sensex and Nifty bounced back on Tuesday after four days of sharp decline on the back of easing retail inflation and rebound in global markets.
 
The 30-share BSE benchmark Sensex rose 170 points, or 0.2 per cent, to settle at 76,499.63.  
 
The NSE Nifty surged 90 points, or 0.4 per cent, to finish the session at 23,176.05.
 
The market capitalisation of BSE-listed firms swelled by Rs 6 trillion to touch Rs 423 trillion.
 
A combination of factors that included heavy buying from domestic investors and gains in global markets after reports suggested that US President-elect Donald Trump's economic team is considering a gradual tariff hike to avoid inflation spike boosted sentiment.
 
 
Indian equities declined on Monday amid heavy foreign portfolio investor (FPI) selling, driven by concerns about corporate earnings for the December quarter and the latest US jobs report, which signalled fewer rate cuts by the US Federal Reserve.
 
FPIs continued to be heavy sellers in Indian equities on Tuesday and were the net sellers of Rs 8,132 crore, while domestic institutions were the net buyers of Rs 7,901 crore. 
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FPI selling on Tuesday was the highest since November 28, 2024. So far in January, FPIs were the net sellers to the tune of Rs 34,383 crore.
 
The gains on Tuesday were broad-based. The Nifty Midcap 100 rose 2.5 per cent a day after it posted its worst single-day decline since June 4 last year, when the general election results rattled markets.
 
The Nifty Small cap 100 rose 1.98 per cent on Tuesday. The market breadth was strong, with 2,823 stocks advancing and 1,144 declining on BSE.
 
“A rebound in the global market and an ease in domestic CPI inflation provided respite to the broader indices. This may provide some leeway for RBI in its next policy meeting; however, rising oil prices and higher 10-year yields will be watched carefully. The IT sector weighed down amid concerns over weak earnings guidance for Q4,” said Vinod Nair, head of research Geojit Financial Services.
 
Most of the gains for Sensex were contributed by HDFC Bank, which rose 0.87 per cent, followed by SBI, which gained 2.5 per cent.
 
Going forward, the domestic sentiment will be determined by the ongoing earnings season and the upcoming Union Budget.
 
"The rebound was largely driven by oversold conditions, which often trigger such recoveries. However, participants should view this as an opportunity to trim positions during further recovery, particularly in mid and smallcap segments. IT and FMCG, which showed resilience until now, are beginning to exhibit signs of weakness, while other sectors remain under bearish pressure. We thus recommend adopting a stock-specific approach and prioritising risk management in the current environment,” said Ajit Mishra, SVP-research of Religare Broking.
   

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First Published: Jan 14 2025 | 6:46 PM IST

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