Bargain hunting and steady inflows drive partial market rebound

Indian equity benchmarks staged a partial recovery on Monday, trimming steep intraday losses as value buying and institutional support helped stabilise sentiment.

The BSE Sensex ended 702.68 points, or 0.91 per cent, lower at 76,847.57, while the Nifty 50 closed down 207.95 points, or 0.86 per cent, at 23,842.65. Both indices, however, rebounded sharply from their day’s lows, with the Nifty recovering nearly 1.5 per cent and the Bank Nifty about 2.5 per cent from intraday troughs.

Value buying supports markets

The primary driver behind the rebound was value buying at lower levels following a sharp gap-down opening of around 2 per cent. Investors selectively accumulated stocks as the Nifty regained the 23,900 mark during the session.

A market rebound refers to prices recovering after a sharp fall, often driven by renewed buying interest rather than a full trend reversal. In this case, investors engaged in “bargain hunting”, picking up stocks at lower valuations after the decline, similar to buying goods at discounted prices, while steady inflows from institutional and retail investors provided the liquidity needed to support prices.

Together, this combination helped markets recover from the day’s lows, even as overall sentiment remained cautious.

Sectorally, realty and metal indices recovered from their lows, while selective gains were seen in energy, media, banking and pharmaceutical stocks. Shares of ICICI Bank reversed early losses to trade over 2 per cent higher, providing support to the indices, even as HDFC Bank remained under pressure.

Broader markets displayed relative resilience, with mid- and small-cap indices limiting their losses to under 1 per cent, indicating selective investor confidence despite overall weakness.

Sectoral divergence persists

Gains remained limited, with fewer than 15 stocks in the Nifty 50 ending in positive territory. Energy and select renewable stocks extended their rally, while automobile and oil & gas stocks continued to lag.

Shares of Maruti Suzuki India, Eicher Motors and Hero MotoCorp were among the biggest decliners. Oil marketing firms such as Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and Indian Oil Corporation also declined as rising crude prices weighed on margins.

The surge in global oil prices followed renewed geopolitical tensions, with Donald Trump warning of a possible blockade of the Strait of Hormuz. Brent crude has since moved above $100 per barrel, adding to market concerns.

Institutional inflows offer support

Investor participation from institutions also played a role in cushioning the fall. Foreign institutional investors remained net buyers in recent sessions, while domestic institutional investors continued to support the market with steady inflows.

Strong flows into equity mutual funds and systematic investment plans (SIPs) have further bolstered liquidity, helping markets absorb selling pressure.

Technical factors aid rebound

From a technical perspective, analysts noted that the Nifty found support around the 23,500–23,700 zone, which helped trigger the recovery.

Market experts indicated that a breach below these levels could lead to further downside, while resistance is likely around the 23,990 mark. For now, the index’s ability to hold key support levels has provided short-term stability.

Despite closing in the red, the sharp recovery from intraday lows suggests that buying interest persists at lower levels, even as broader sentiment remains cautious amid global uncertainties.

With PTI, IANS inputs