Indian Stock Markets Rebound: Sensex & Nifty Up 5% This Week

New Delhi, Mar 24 (PTI) Domestic equity markets have reversed this year's losses as both benchmark indices Sensex and Nifty extended their winning momentum to the sixth day in a row on Monday after facing heavy corrections recently.

Return of foreign investors after a prolonged period of selling, bargain hunting at lower levels, better valuations and the US Fed signalling two rate cuts in 2025 have boosted investor sentiment, experts said.

The 30-share BSE benchmark Sensex has jumped 4,155.47 points or 5.62 per cent in six days since March 17. The NSE Nifty zoomed 1,261.15 points or 5.63 per cent during this period.

The Sensex had tanked 4,302.47 points or 5.55 per cent last month, while in January it declined 638.44 points or 0.81 per cent.

So far in March, the BSE benchmark surged 4,786.28 points or 6.53 per cent.

"Indian markets had a remarkable rebound in March so far. Bargain hunting at lower levels and better valuation, return of foreign investors amid softer dollar and lower US yields and domestic macro-outlook getting better, are the reasons that may have factored in the rebound," Satish Chandra Aluri, Analyst, Lemonn Markets Desk, said.

Market valuations have come down drastically in recent corrections with investors now finding relative valuation comfort, he said.

On Monday, the Sensex jumped 1,078.87 points or 1.40 per cent to settle at an over six-week high of 77,984.38. During the day, it zoomed 1,201.72 points or 1.56 per cent to 78,107.23. The Nifty surged by 307.95 points or 1.32 per cent to 23,658.35. Intra-day, the benchmark zoomed 358.35 points or 1.53 per cent to 23,708.75.

"After selling a record USD 29 billion over the last five months, foreign investors are showing renewed interest turning net buyers in recent sessions. Foreign outflows have been a major factor in recent corrections. Softer US dollar, after the Trump trade war sparked concerns over US growth, also helped as capital moved from the US to Europe and EMs like India etc," Aluri noted.

He further said that domestic growth showing signs of revival with Q3 GDP coming at 6.2%, compared to 5.6% in Q2. Increase in govt spending coupled with rebound in agriculture output due to monsoon helped the rebound.

"US Fed meeting and latest projections maintaining two rate cuts in 2025 also boosted sentiment," Aluri said.

Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, Nifty rallied by 1.3 per cent to close at 23,658 level, turning positive for CY 2025.

"The key factor driving the domestic market is the return of FII inflows after a prolonged selling period. Market sentiments were further supported by positive global cues after the US President hinted about flexibility in reciprocal tariffs," Khemka added.

The BSE midcap gauge jumped 1.32 per cent and smallcap index climbed 1.17 per cent.

All BSE sectoral indices ended higher, with bankex rallying 2.53 per cent, utilities (2.42 per cent), power (2.31 per cent), industrials (2 per cent), financial services (1.97 per cent), capital goods (1.95 per cent) and realty (1.51 per cent).

Vinod Nair, Head of Research, Geojit Investments Limited, said, "The domestic market experienced a robust rally, spurred by value buying as valuations returned to long-term averages and early indications of earnings growth recovery emerged. Increased government spending and expected monetary easing are anticipated to boost optimism in rate-sensitive sectors such as banking, NBFCs, auto, consumer durables, and real estate, leading to potential outperformance."

As many as 2,496 stocks advanced while 1,640 declined and 162 remained unchanged on the BSE.

"The Indian equity markets staged a strong recovery, erasing all losses from 2025, with the Nifty-50 and BSE Sensex rallying over 7.5% from their recent swing lows of 21,964.60 and 72,633.54, respectively.

"The market's uptrend was largely driven by technical buying and value accumulation, particularly after the Nifty-50 breached the key psychological level of 22,000, rather than any significant fundamental shifts," Vishnu Kant Upadhyay, AVP – Research & Advisory, Master Capital Services Ltd, said.

Additionally, FIIs turned net buyers, seizing attractive valuations and further accelerating the rally, he added.