Sensex, Nifty Bounce Back From Red as Bihar Election Trends Hint at NDA Edge

The equity benchmarks, NSE Nifty 50 and BSE Sensex, witnessed a sharp recovery during the closing hours on Friday. At around 3.25 pm, the Sensex recovered to 84,654.53, up over 600 points from the day's low of 84,029.32. Similarly, the broader Nifty also reached at 25,925.55, up from the day's low of 25,740.80.

However, the stock market indices opened in the red amid volatility even as the National Democratic Alliance (NDA) took an early lead in the Bihar election results. Despite the sharp late-session rebound in the benchmarks, the overall mood through the day remained cautious as investors tracked swings linked to the Bihar election trends.

Market experts stated that the morning sell-off and the intraday volatility largely reflected the political overhang, but the recovery toward the closing suggested traders were not willing to take aggressive positions either way.

Ashika Institutional Equities noted that the Nifty largely moved within a narrow band, signalling an absence of strong directional conviction. It pointed out that pockets such as PSU banks, CPSE stocks, pharma, media and FMCG saw steady buying, while technology, metals, autos and manufacturing names remained under pressure.

“The ongoing Bihar election results added an element. In the derivatives segment, an open interest buildup was observed in MUTHOOTFIN, BDL, EICHERMOT, IIFL and VOLTAS, indicating active participation in these counters. For the Nifty index, 25,900 and 26,000 strikes held the highest call OI, whereas 25,700 and 25,800 strikes saw the highest put OI, suggesting key resistance,” Ashika added.

Vinod Nair, Head of Research, Geojit Investments Limited also echoed similar sentiments, saying the market managed to close in the green, supported by banking and FMCG stocks, while the NDA victory in the Bihar state election added impetus to sentiment.

"A positive turnaround in Q2 FY26 results and benign inflation are making H2 FY26 earnings outlook brighter. Investors are looking for additional catalysts for a decisive move from current levels. The upcoming RBI policy meeting and any cues on the US trade deal are expected to keep market sentiment bullish," he said.

The Nifty gave a surprise rally towards the end of the session, cheering the Bihar election mandate, said Rupak De, Senior Technical Analyst at LKP Securities. On the lower end, it found support around the 50 EMA on the hourly chart before the sharp intraday recovery.

"Sentiment remains strong, with the potential to move towards 26,200/26,350 in the short term. Though meaningful resistance is placed around 26,000, the magnitude of the late-session recovery indicates a smart upside move in the coming days".

Even as equity indices moved in a narrow range shaped by election-linked uncertainty, the commodity market reacted to an entirely different set of cues. Gold prices softened due to global factors, with Jateen Trivedi of LKP Securities noting that hawkish signals from the US Federal Reserve and a stronger dollar weighed on bullion.

"The dollar index strengthened, adding additional pressure on gold. Prices slipped from this week’s high of ₹1,27,000 to ₹1,25,600 but still hold weekly gains of around 4%. Gold is expected to remain volatile within a range of ₹1,24,000–₹1,27,500," he said.

He noted that rupee traded in a narrow range near 88.70 as the dollar index remained flat around $99.20, offering limited directional cues. With no major US data releases due to the recent shutdown, Trivedi said the market stayed largely dependent on flows, where mixed FII activity and consistent DII buying kept the rupee in a confined band.

Sectoral trends remained mixed, with pharma, FMCG, and financials finishing in the green, while IT, metal, and auto traded under pressure during the day. The mid-cap and small-cap indices moved largely in tandem with the benchmark, reflecting selective participation rather than broad-based buying.