Sensex Recovers 1,000 Points From Day's Low To End Flat Amid Value Buying

Benchmark indices staged a sharp recovery on Monday to end marginally higher after witnessing heavy selling pressure during the first half of the session. The recovery was driven by value buying in select sectors, particularly information technology shares, even as concerns around rising crude oil prices, geopolitical uncertainty and rupee weakness continued to keep sentiment cautious.

The Sensex ended 77.05 points or 0.1% higher at 75,315.04, while the Nifty closed nearly flat with gains of 6.45 points or 0.03% at 23,649.95. Earlier in the day, benchmark indices had fallen as much as 1.3% amid weak global cues and concerns surrounding the prolonged US-Iran conflict.

Despite the recovery in headline indices, market breadth remained weak. Around 2,891 shares declined against only 1,216 advancing stocks, indicating that selling pressure remained dominant beneath the surface. Broader market performance also reflected caution as midcap and smallcap indices continued to underperform.

IT Stocks Lead Recovery

The strongest support for benchmark indices came from technology stocks, which rebounded sharply after witnessing heavy selling pressure last week. The Nifty IT index rose 2.4%, emerging as the top-performing sector after having declined nearly 5.7% during the previous week.

Market participants attributed the rebound largely to value buying and the strengthening US dollar. Since major Indian IT companies derive a significant portion of revenue from overseas markets, especially in dollar terms, a stronger US currency tends to improve earnings visibility for exporters.

Tech Mahindra emerged as the top performer in the Nifty50 and gained 3.3%. Other technology names including Infosys, Wipro and HCL Technologies also rose between 1% and 2%. Across the broader technology space, Coforge climbed nearly 4%, while LTIMindtree, Mphasis and Persistent also witnessed strong gains.

Vinod Nair, Head of Research at Geojit Investments, said the prolonged uncertainty surrounding the US-Iran conflict continues to impact market sentiment. However, he noted that value buying in IT and banking stocks helped markets recover from lower levels despite concerns around crude prices, bond yields and currency weakness.

Value Buying After Recent Selloff

The sharp intraday rebound came after investors stepped in to buy stocks at lower levels following the recent correction. The Sensex recovered almost 1,000 points from the day’s low as bargain buying emerged across select sectors.

Both benchmark indices had corrected significantly in recent sessions. The Sensex and Nifty had cumulatively fallen nearly 3.5% and 4%, respectively, over the previous six sessions amid concerns around rising oil prices, foreign selling and geopolitical uncertainty.

Nair said investors appear to be adopting a staggered allocation strategy instead of waiting for complete clarity on macro risks. He added that export-oriented sectors are seeing selective buying interest despite broader market volatility.

However, weakness persisted across several sectors. Automobile stocks remained under pressure with Bajaj Auto, Maruti Suzuki and Eicher Motors declining between 1.5% and 2%. Banking and financial shares also remained weak, with Shriram Finance and Jio Financial Services ending lower.

Metals, Power Stocks Remain Under Pressure

While IT stocks supported the market, weakness in metals and infrastructure shares limited gains. Tata Steel declined 5% after reporting weaker-than-expected fourth-quarter earnings. Hindalco also fell around 2% amid pressure in the broader metals segment.

Power Grid emerged as one of the worst-performing benchmark stocks and declined 4.1% despite reporting a nearly 10% rise in quarterly profit. Analysts pointed out that revenue and operating performance fell short of expectations despite support from deferred tax assets.

Among broader market stocks, Amber Enterprises fell sharply and declined nearly 15%, emerging as the biggest loser in the Nifty500 universe. Cochin Shipyard also witnessed selling pressure and declined almost 6%.

The Nifty Consumer Durables index ended as the worst-performing sector and declined nearly 3%, while Nifty Media and PSU Bank also remained under pressure during the session.

Volatility And Macro Risks

Although markets recovered from intraday lows, volatility and broader macro risks continued to remain elevated. India VIX eased slightly from higher levels but remained elevated around 19.63, indicating continued nervousness among investors.

Meanwhile, the Indian rupee weakened sharply and closed at a fresh record low of 96.35 against the US dollar. The domestic currency remained under pressure due to elevated crude oil prices, sustained foreign fund outflows and geopolitical uncertainty linked to West Asia.

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said Nifty formed a bullish candle with a noticeable lower wick, indicating buying interest emerging at lower levels. However, he cautioned that the index continues to trade below its 20-day EMA while sellers still maintain an upper hand.

Nilesh Jain, VP - Head of Technical and Derivative Research at Centrum Finverse, said the market recovered strongly from lower levels but technical indicators continue signalling weakness. According to Jain, the immediate hurdle for Nifty remains near 23,770 while support is placed around 23,300. He added that India VIX remaining elevated above 19 continues to be a concern for bullish sentiment.