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Dalal Street Bounces Back: Sensex Jumps Over 300 Points, Nifty Above 25,195 as Recovery Kicks In
After four consecutive sessions of decline, the Indian equity benchmark indices, Nifty50 and BSE Sensex, concluded today's trading session firmly in the green, signaling a much-needed rebound for the market. The BSE Sensex gained 317.45 points (0.39%) to close at 82,570.91, while the NSE Nifty climbed 113.50 points (0.45%) to settle at 25,195.80. This recovery provided a fresh breath of air for investors after a period of downward pressure.
Sectoral Leaders and Market Catalysts
The upturn was primarily driven by robust buying activity in the automobile and pharmaceutical sectors. Among the Sensex constituents, Sun Pharma, Trent, Tata Motors, Bajaj Finserv, Mahindra & Mahindra, and Bajaj Finance emerged as top gainers, showcasing renewed investor confidence in these resilient segments. Conversely, HCL Tech experienced a notable decline following its Q1 consolidated net profit announcement, indicating selective selling.
Adding to the positive sentiment was the crucial announcement that retail inflation in June decreased to 2.1%, marking its lowest point in over six years. This significant dip, primarily due to subdued food prices, particularly vegetables, brings inflation closer to the Reserve Bank of India's (RBI) comfort target range. This positive development strongly fuels expectations of a further rate cut by the RBI, which could potentially accelerate future economic growth by making credit cheaper.
Expert Insights and Institutional Activity
Vinod Nair, Head of Research at Geojit Investments Limited, commented, "Market sentiment is showing signs of improvement, supported by a blend of global and domestic developments. Optimism is growing around the possibility of an interim trade agreement with the US, which could lead to a moderation in tariff-related risks. Concurrently, domestic inflation has fallen to multi-year lows, strengthening expectations of a further rate cut by the RBI—potentially accelerating future economic growth, which is currently showing signs of improvement."
On the institutional front, Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth ₹1,614.32 crore on Monday. However, Domestic Institutional Investors (DIIs) provided crucial market support by purchasing stocks worth ₹1,787.68 crore, demonstrating continued domestic faith in the Indian market's long-term prospects. This DII buying helped cushion the FII outflows.
The market's ability to bounce back, coupled with positive macroeconomic indicators, provides a sense of cautious optimism as the Q1 earnings season progresses. Investors will be keenly watching upcoming corporate results for further cues and a clearer direction for the market.