NSE’s Nifty rose 217.95 points, or 0.91%, to end at 24,213.30. BSE’s Sensex gained 694.39 points, or 0.88%, to close at 79,476.63. The gains were the highest in a day since September 20. The upside was fueled by metal and bank stocks.
“We had been anticipating a rebound after the sharp correction and selloff in the last five to six weeks,” said Amit Khurana, head of equities at Dolat Capital Market. “This is because it had put a lot of stocks in the oversold territory and made a couple of sectors like FMCG, pharma, banks and chemicals look attractive after the fall.”
Foreign portfolio investors net sold shares worth ₹2,569.4 crore and domestic institutions were buyers to the tune of ₹3,031 crore during on Tuesday.
Khurana said that the growth numbers of the Manufacturing PMI index may also have boosted the sentiment.
The HSBC India Manufacturing Purchasing Managers’ Index (PMI) had registered a growth in October to 57.5 from 56.5 in the previous month. China’s Manufacturing PMI index for the same month also rose, driving the rally in metal stocks here.Analysts said the bounce above 24,000 is a relief for optimists. “Nifty has successfully reclaimed the 24,000 level after a strong recovery from today’s low, showcasing resilience and a respect for critical support levels,” said Mehul Kothari, deputy vice president – technical research at Anand Rathi Shares and Stock Brokers. Kothari said that a break above the 24,350 level would potentially pave the way for a rally towards 25,000 in the near term, especially if the upcoming US election results support the market sentiment.
The Sensex and Nifty have dropped nearly 7% since October 1 with foreign investors dumping stocks worth over Rs1.17 lakh crore.
Khurana says a sharp recovery in the indices may happen only after FPIs stop selling in India.