Indian stock markets staged a remarkable intraday comeback on Monday, recovering sharply from steep morning losses as value buying in IT and banking stocks helped benchmark indices erase most of the day’s damage. The Sensex rebounded nearly 1,200 points from its intraday low, while the Nifty 50 managed to close above the crucial 23,650 mark, signaling resilience despite mounting macroeconomic pressures.
Key Highlights
- Sensex recovered 1,200 points from intraday lows as IT and banking buying lifted sentiment.
- Nifty closed above 23,650 despite rupee weakness, rising crude oil and persistent inflation concerns.
The trading session began on a weak note, with investors reacting nervously to rising crude oil prices, a weakening rupee, and broader global uncertainty. During intraday trade, the Sensex plunged over 1,000 points to touch 74,180, while the Nifty slipped over 1% to hit the day’s low of 23,317.
However, strong buying emerged in heavyweight IT and select banking counters during the latter half of the session, allowing markets to recover sharply. At closing, the Sensex settled 77.05 points higher at 75,315.04, while the Nifty edged up 6.45 points to close at 23,649.95.
Investor Wealth Sees Temporary Erosion
The sharp morning selloff temporarily wiped out nearly Rs 8 lakh crore in investor wealth, with the total market capitalization of BSE-listed firms falling below Rs 453 lakh crore, compared to around Rs 461 lakh crore in the previous session. The recovery later narrowed these losses substantially.
IT Stocks Lead the Recovery
Sector-wise, Information Technology, Healthcare, and Telecom stocks led the rebound, with the Nifty IT index emerging as the top gainer.
Among major outperformers, Coforge surged nearly 4%, supported by fresh buying interest as investors rotated toward export-driven sectors expected to benefit from currency weakness.
Meanwhile, sectors including Auto, Capital Goods, Metals, Oil & Gas, Consumer Durables, Power, Commodities, and Realty remained under pressure amid concerns over inflation and rising input costs.
Stock Market volatility also cooled slightly, with India VIX easing from 20.05 to 19.63, offering some relief to traders after recent sharp swings.
Geopolitical Signals Support Market Recovery
Sentiment improved during the latter half of the day following comments from US President Donald Trump, which investors interpreted as a possible easing of geopolitical tensions.
Vinod Nair, Head of Research at Geojit Investments Limited, said: “The prolonged stalemate between the US and Iran continues to cast a shadow over near-term sentiment, yet the equity market managed to recover intraday losses and closed on a flat note, supported by value buying in IT and banking stocks.”
He added that while earnings season remains constructive, concerns around higher bond yields, elevated crude oil prices, and a weakening rupee continue to reinforce inflationary risks.
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Analysts Warn of Continued Volatility
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted: “Markets are likely to remain event-driven in the near term, with volatility expected to persist amid elevated crude oil prices near USD 106 per barrel, continued rupee weakness, rising bond yields, and mounting inflationary concerns.”
The Indian rupee touched a fresh low of 96.2 against the US dollar, adding pressure to market sentiment and complicating the Reserve Bank of India’s policy flexibility.
Market participants will now closely monitor global crude price movements, geopolitical developments in West Asia, rupee trajectory, and upcoming corporate earnings reports for fresh directional cues as Dalal Street navigates a volatile macroeconomic landscape.
