Market Wrap

Indian equity markets staged a strong recovery on Monday, reversing early volatility to close with solid gains. Although GIFT Nifty had indicated a positive start, the Nifty 50 opened on a cautious note and traded in a choppy range through most of the session. The index even slipped below the 23,000 mark during the day as investors remained wary of global uncertainties and rising geopolitical risks.

However, sentiment improved sharply in the penultimate hour of trade as strong buying interest emerged across key sectors. This late-session rally pushed the benchmark index above 23,500 at its intraday high before it finally settled above 23,400, ending the session 1.11% higher.

Broader markets also showed signs of recovery after several sessions of weakness. The auto sector emerged as the strongest performer, with the sectoral index rising over 1.5% amid renewed buying interest in auto majors. Other cyclical pockets also witnessed selective accumulation as investors took advantage of recent valuation corrections.

Global cues remained mixed. Asian and European markets traded without a clear direction following recent volatility triggered by geopolitical tensions and uncertainty around global trade flows.

At the macro level, investor sentiment continues to be shaped by rising geopolitical risks. Former U.S. President Donald Trump issued strong warnings to NATO allies and urged major economies including the UK, France, Japan, South Korea, and China to help secure the Strait of Hormuz, one of the world’s most critical oil supply routes. The comments added to concerns over potential disruptions in energy markets.

As a result, Brent crude oil has moved toward the $120 per barrel zone, a level that could intensify inflationary pressures globally and potentially weigh on equity markets if sustained.

Interestingly, the recent market correction has also cooled valuations significantly. The Nifty’s price-to-earnings (PE) ratio has moderated toward the 17–18x range, while nearly 51% of BSE 500 companies are now trading below their three-year average valuations, indicating that selective value opportunities may be emerging for long-term investors.

What's Ahead

Markets are likely to remain volatile in the near term as several key triggers line up this week.

The weekly derivatives expiry could amplify short-term swings, especially after Monday’s sharp intraday reversal. At the same time, investors will closely track developments in the Middle East geopolitical situation and movements in crude oil prices, which remain critical macro variables for inflation and market sentiment.

Another major global event on investors’ radar is the upcoming U.S. Federal Reserve policy decision. Any signals regarding the future path of interest rates or liquidity conditions could influence global capital flows, including allocations toward emerging markets like India.

If crude oil prices stabilize and geopolitical tensions ease, Indian equities could witness a technical rebound after the recent correction. However, the exact timing of a durable bottom remains uncertain, suggesting that stock-specific opportunities rather than broad market momentum may dominate the near term.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 witnessed a strong rebound from intraday lows and closed at 23,408.80, gaining 257.70 points (1.11%), supported by broad-based buying in cement, auto, and financial heavyweights. The index briefly slipped below the 23,000 mark during early volatility but recovered sharply as buying emerged in large-cap stocks. Technically, momentum indicators suggest early signs of stabilization, with the RSI rising near the 30 level, indicating the index is still close to oversold territory but showing easing bearish pressure. While macro concerns such as the Iran–Israel conflict, elevated crude oil prices above $100, a weakening rupee, persistent FII outflows, and high global bond yields continue to weigh on sentiment, the strong recovery from lower levels hints at potential short-term consolidation or rebound attempts. Immediate support is placed at 22,778 followed by 22,385, while resistance levels are seen at 24,051 and 24,445.

Bank Nifty

The NIFTY BANK index closed higher by 655.55 points (1.22%) at 54,413.40, supported by buying in heavyweight private and PSU banking stocks, particularly HDFC Bank, SBI, and Axis Bank. The index experienced early volatility, falling to an intraday low before staging a steady recovery in the latter half of the session and closing near the day’s high, reflecting renewed buying interest in key banking counters. From a technical perspective, the RSI is edging toward the 30 level, suggesting that bearish momentum is gradually easing after the recent correction. The price action indicates potential stabilization if buying continues in heavyweights. Near-term support is placed at 52,484 followed by 51,290, while resistance levels are seen at 56,343 and 57,537, which could act as key hurdles for further upside.

Nifty Financial Services

The NIFTY FINANCIAL SERVICES index ended the session at 25,515.25, rising 376.60 points (1.50%), driven by strong buying across financial heavyweights including HDFC Bank, Bajaj Finance, SBI, and Axis Bank. The index maintained a positive trend through the session as financial stocks witnessed renewed accumulation following the recent correction. Market breadth remained supportive with the majority of constituents closing in the green, reflecting improving sentiment within the financial space. Technically, the index is showing early signs of recovery after testing lower levels, though sustainability of the move will depend on continued strength in large-cap banking and NBFC stocks. Immediate support levels are placed at 24,687 and 24,169, while resistance is seen at 26,362 and 26,880.

Sensex

The BSE SENSEX ended the session 938.93 points higher (1.26%) at 75,502.85, supported by strong gains in heavyweight stocks across cement, financials, and auto sectors. Stocks such as UltraTech Cement, Trent, HDFC Bank, and Mahindra & Mahindra led the advance, while select declines in stocks like BEL, Sun Pharma, and PowerGrid limited the overall upside. The index remained volatile earlier in the session but witnessed sustained buying momentum later in the day, helping it close firmly in positive territory. From a technical standpoint, the recovery indicates improving short-term sentiment after the recent correction, although global uncertainties and macro headwinds could continue to influence market direction. Near-term support is placed at 73,348 followed by 72,015, while resistance levels are seen at 77,657 and 78,990.