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The Indian stock market experienced a significant rebound after a sharp sell-off on April 7th that erased a substantial Rs 16 lakh crore in market capitalization. Both the Sensex and Nifty indices showed strong gains, snapping a three-day losing streak. The recovery was broad-based, with all 13 sectoral indices rising around 2 percent, indicating widespread buying interest across various segments of the market. At approximately 2:45 pm, the Sensex was up 1,235.65 points, or 1.69 percent, reaching 74,373.55, while the Nifty climbed 409.00 points, or 1.85 percent, to 22,570.60. Market breadth was positive, with 2841 shares advancing, 612 shares declining, and 89 shares remaining unchanged. Among the top gainers on the Nifty were Jio Financial Services, Shriram Finance, Titan Company, Adani Enterprises, and Eicher Motors. The India VIX, a key indicator of market volatility often referred to as the "fear gauge," also experienced a notable decline, dropping by 9 percent to hover around the 20 mark. This followed a dramatic surge the previous day when the index had spiked by as much as 60 percent to reach a five-year high. This cooling off in volatility suggests a temporary easing of investor concerns, but market experts continue to advise caution given the ongoing uncertainties related to global trade tensions.
Several factors contributed to the market's initial decline and subsequent rebound. The primary driver behind the recent sell-off was the fear of a full-blown global trade war and its potential to trigger a global recession. Countries such as China, Canada, and the European Union have expressed concerns and threatened retaliatory tariffs on American goods, creating widespread nervousness among investors regarding whether a settlement can be reached before further tariff escalations. Despite the rebound, market experts advised investors to remain cautious in the short term, citing the continuing uncertainty stemming from these trade-related tensions. Chetan Ahya, Chief Asia Economist at Morgan Stanley, noted that India is unlikely to remain immune to the global slowdown resulting from escalating tariff wars and suggested that India could face a 40 to 50 basis point downside in GDP growth as a consequence of ongoing tariff tensions. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, suggested a wait-and-watch approach, emphasizing that it would take time for clarity to emerge. However, he also noted that India’s macros are stable and that the country can potentially grow at around 6 percent in FY26. He considered valuations, particularly in large caps, to be fair and advised long-term investors to consider "nibbling" at high-quality large-cap stocks, especially leading financials. Additionally, he suggested that pharma stocks, which are attractively priced, may be good buys, as Trump is unlikely to impose tariffs on pharmaceuticals at this stage.
Sector-wise, all indices traded in positive territory, with the Nifty IT index leading the rebound after experiencing an 8 percent decline over the past five sessions. Tech majors such as TCS, Infosys, HCL Tech, and Wipro rose as much as 4 percent in the afternoon session as the sector prepared to kick off its March-quarter earnings season in two days. Following the IT rally, strong gains were also observed in the Nifty Realty, Nifty Pharma, and Bank Nifty indices, which climbed up to 2 percent. The broader market, represented by the mid and small-cap 100 indices, mirrored the positive trends with gains of 2.3 percent each. In other news, shares of oil marketing companies (OMCs) such as Hindustan Petroleum Corp., Bharat Petroleum Corp., and Indian Oil Corp. surged in trade following the government's decision to raise the price of household LPG and the special excise duty on petrol and diesel. Oil companies are expected to recover around Rs 9,000 crore in FY26 through the Rs 50 hike in domestic LPG prices, offsetting ongoing losses, according to sources. Additionally, shares of Info Edge, the parent company of job search platform Naukri.com, surged nearly 5 percent after reporting a 19 percent rise in standalone billings during the January-March quarter of financial year 2025. The shares of the company were trading 4.5 percent higher at Rs 6,684 apiece in the afternoon. Shares of Electronics Manufacturing Services (EMS) firms in India also rose about 9 percent amid reports of Apple planning to source more iPhones from India to the US to mitigate the impact of tariffs imposed on China. The Cupertino-based tech major is reportedly considering this plan as a temporary measure to offset the high cost of imports due to the tariffs.
From a technical analysis perspective, Sameet Chavan of Angel One noted that the market conditions appear troubled, as indicated by the VIX spiking over 65 percent in one day. He highlighted this dramatic increase in volatility as a sign of significant uncertainty among investors. He identified the 22,000-21,800 level as a potential support zone, which he anticipates will help stabilize the market amid the heightened volatility. However, he warned that a breach below this support level, combined with a "Downward Sloping Channel" identified on the daily chart, could lead to a decline towards 21750-21400 in the coming period. Overall, the market's rebound provides a temporary respite after a period of intense selling pressure. However, the underlying uncertainties related to global trade tensions and potential economic slowdowns continue to weigh on investor sentiment. Market experts emphasize the importance of maintaining a cautious stance and carefully monitoring developments in the global economic landscape. Long-term investors with a higher risk tolerance may consider gradually accumulating high-quality large-cap stocks, particularly in sectors that are expected to benefit from India's stable macroeconomic environment and growth potential. However, they should be prepared for potential volatility and downside risks in the short term. The government's policy decisions, such as the increase in LPG prices and excise duties on petrol and diesel, are likely to have a positive impact on the financial performance of oil marketing companies, providing a boost to their stock prices. Similarly, the strong performance of Info Edge's Naukri.com and the potential increase in iPhone sourcing from India are positive developments for the respective companies and sectors. The market's overall performance in the coming weeks and months will depend on a variety of factors, including global economic conditions, trade relations, corporate earnings, and government policies. Investors should closely monitor these factors and adjust their investment strategies accordingly.
In conclusion, the Indian stock market's rebound following the sharp sell-off provided a much-needed boost to investor confidence. However, the underlying uncertainties related to global trade tensions and potential economic slowdowns continue to cast a shadow over the market's outlook. Market experts advise investors to remain cautious and selective in their investment decisions, focusing on high-quality companies with strong fundamentals. The government's policy measures and corporate earnings announcements are likely to influence market sentiment in the near term. The India VIX remains a crucial indicator of market volatility, and investors should closely monitor its movements to gauge the level of uncertainty in the market. While the rebound is a positive sign, it is essential to recognize that the market remains vulnerable to potential shocks and corrections. A well-diversified portfolio and a long-term investment horizon are crucial for navigating the current market conditions. The emphasis on high-quality large-cap stocks reflects a preference for companies with established track records, strong financial positions, and the ability to withstand economic headwinds. The suggestion to consider pharma stocks highlights the potential for certain sectors to benefit from specific market conditions and policy changes. The increased iPhone sourcing from India presents an opportunity for Electronics Manufacturing Services (EMS) firms in the country. The oil companies' surge resulting from revised fuel prices, shows that government interventions can have positive outcomes for specific sectors.
Furthermore, the market's reaction to the technical indicators should not be overlooked. Sameet Chavan's observation regarding the VIX's spike and the downward sloping channel on the daily chart indicates a level of technical uncertainty among investors, which could lead to increased volatility in the near future. The specified support level is key to watch, and the market will most likely react strongly if breached. Investors can make rational decisions based on these technical indicators, but it's important to consider any external events that may influence the markets as a whole. In addition to technical analysis, investors must also be wary of any external or political announcements that may affect companies and stocks in specific ways. An example of this would be global trade wars which, in the current market, are a huge driving factor for investors. Companies that are more reliant on exports and imports would definitely be significantly affected by the outcome of these global trade tensions. With so many driving factors, it is critical to be aware of the market's movement as well as any other factors involved that may sway investors in various ways.
The strong performance of the mid and small-cap indices reflects a broader investor interest in smaller companies with high growth potential. However, these stocks are often more volatile than their larger counterparts and carry a higher level of risk. Investors should carefully assess their risk tolerance and conduct thorough due diligence before investing in mid and small-cap companies. The surge in shares of Info Edge's Naukri.com highlights the resilience of the Indian job market and the growing demand for online recruitment services. The company's strong billing performance indicates a positive outlook for the sector, driven by increasing hiring activity and a growing number of job seekers using online platforms. The surge in EMS firms in India underscores the country's growing importance as a manufacturing hub for electronics. Apple's decision to source more iPhones from India reflects the company's efforts to diversify its supply chain and reduce its reliance on China. This move is expected to benefit Indian EMS firms by increasing their production volumes and creating new job opportunities. These various events show how there are driving factors in the market which may influence the way the market reacts as a whole.
Source: Sensex up 1,200 pts, Nifty above 22,500 as all sectors rally; small, mid caps outperform