Sensex, Nifty bounce back; close higher as financials lead the charge ahead Diwali celebrations!

Despite ongoing pressure from Foreign Institutional Investor (FII) outflows, the Indian stock market found strength on October 29. Aishvarya Dadheech, Founder & CIO of Fident Asset Management, suggested that strong results from ICICI Bank and several public sector banks could provide stability as the Diwali festival approaches.

Market Recap

On October 29, the Sensex and Nifty saw a significant recovery in the latter half of the trading session, closing higher due to gains in financial and construction stocks. However, sectors such as auto, IT, and pharma faced selling pressure. The Sensex rose by 363 points (0.5%) to close at 80,369, while the Nifty increased by 127 points (0.5%) to finish at 24,466. The market breadth was positive, with 2,171 shares advancing, 1,533 shares declining, and 121 shares remaining unchanged. The BSE Midcap and Smallcap indices also joined the rebound, each gaining 0.7%.

Expert Insights

Jigar Patel, Senior Manager of Equity Research at Anand Rathi Shares & Stock Brokers, noted, "Support for Nifty is seen at 24,100, with strong put writing near 24,000. Resistance lies at 24,500. A close above 24,500 could open the door to 25,000–25,200, supporting a bullish outlook for at least the next week and a half."

Morning Session Highlights

The Indian benchmarks opened flat but quickly dipped into the red due to concerns over Q2FY25 earnings, persistent FII selling, and a sell-off in auto and IT stocks. However, easing tensions in the Middle East and a decline in crude prices provided some relief.

Top Performers and Laggards

Leading the gains were SBI, SBI Life, ICICI Bank, HDFC Life, and Bharat Electronics, which each rose between 3% and 5%. In contrast, Maruti Suzuki, Tata Motors, Hero MotoCorp, Dr. Reddy's, and IndusInd Bank emerged as the major laggards, falling between 2% and 4%. Notably, SBI surged over 5% to become the top gainer on the Nifty 50.

Sector Performance

The auto index experienced a 1.6% decline, driven by selling pressure in Tata Motors, Maruti Suzuki, and Mahindra & Mahindra. Maruti Suzuki’s shares dropped nearly 4% after an 18% decrease in net profit for Q2FY25, negatively impacting sentiment in the auto sector.

Market Outlook

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, mentioned that the recent market correction has alleviated overvaluation, especially in defence and railway stocks. He emphasized that the trend towards quality, particularly in private financials, is expected to continue.

Upcoming Events

Akshay Chinchalkar, Head of Research at Axis Securities, highlighted the uncertainty among buyers and sellers due to the ongoing correction. This hesitation is typical ahead of significant events such as the non-farm payroll report on November 1 and the US elections.

Disclaimer

The views and investment tips expressed by experts are their own and do not necessarily reflect those of Moneycontrol.com. Users are advised to consult certified experts before making any investment decisions.