(Photo : BT )
Sensex, Nifty Surge

• The Indian stock market rebounded on Monday, breaking a five-day losing streak with the Sensex and Nifty seeing significant gains.
• The rally was primarily driven by banking stocks, with broad-based gains across sectors.
• Market analysts attribute the rebound to strong quarterly earnings from ICICI Bank and Bank of Baroda, but caution about ongoing foreign institutional selling and weaker corporate earnings.
• The key technical level for the Nifty is seen at 24,000, with strength likely to persist above this level, while a drop below could trigger panic.

The Indian stock market experienced a significant rebound on Monday, breaking its five-day losing streak. The Sensex surged by 602 points to close at 80,005, while the Nifty climbed 158 points to settle at 24,339. This marked the best session for the benchmark indices in a month, providing a much-needed respite for investors who had been grappling with the market's recent downturn.

The rally was primarily driven by banking stocks, with the Nifty Bank closing at 51,259, up by 471 points or 0.93 per cent. This sector's performance was a key factor in the market's overall rebound, underscoring the critical role of banking stocks in the Indian stock market's dynamics.

Among the Sensex components, ICICI Bank, Wipro, Tata Steel, JSW Steel, M&M, Sun Pharma, HUL, SBI, Tata Motors, Bajaj Finserv, Asian Paints, IndusInd Bank, NTPC and HCL Tech emerged as the top gainers. On the other hand, Axis Bank, Kotak Mahindra Bank, Tech Mahindra, HDFC Bank and Bharti Airtel were the top losers.

Broad-Based Gains Across Sectors

Interestingly, almost all indices on the National Stock Exchange (NSE) closed with gains. Major gainers included sectors such as PSU Bank, pharma, FMCG, realty, auto, IT and media. This broad-based gain suggests a widespread recovery across sectors, which is a positive sign for the overall health of the market.

In addition to large-cap stocks, buying was also seen in midcap and smallcap stocks. The Nifty Midcap 100 index was at 55,736, up 458 points or 0.83 per cent, and the Nifty Smallcap 100 index was at 18,062, up 214 points or 1.20 per cent. This indicates that the market's recovery was not confined to large-cap stocks but also extended to smaller companies, reflecting a comprehensive rebound.

Market analysts offered their insights into this market rebound. Vaibhav Vidwani, a Research Analyst at Bonanza, noted that the rally followed a five-day losing streak and was largely driven by strong quarterly earnings from ICICI Bank and Bank of Baroda, which boosted investor sentiment.

Analysts' Take on Market Rebound

However, Vidwani also cautioned that ongoing foreign institutional selling and weaker corporate earnings could continue to pressure the market in the near term. Echoing Vidwani's cautious optimism, Rupak De, a Senior Technical Analyst at LKP Securities, observed that the Nifty remained volatile during the day before closing with a meaningful gain.

De pointed out that the Nifty sustained above the previous day's low, indicating strength in buying. He suggested that this strength may persist as long as the Nifty stays above 24,000. However, he warned that a decisive drop below 24,000 might trigger panic in the market. On the higher end, he saw resistance at 24,500, and a move above this level could spark a rally in the Nifty.

Historically, such market rebounds have been seen in the aftermath of significant events or announcements that have a broad impact on the economy. For instance, in the past, strong quarterly earnings reports from major companies have often led to market rebounds. Similarly, policy changes or announcements by the government or central bank that are seen as positive for the economy have also triggered market rallies.