Market capitalization surges by ₹6 trillion to hit ₹423 trillion; Sensex gains 170 points

Benchmark indices Sensex and Nifty bounced back on Tuesday after a four-day losing streak, buoyed by easing retail inflation and a recovery in global markets.

The BSE Sensex climbed 170 points, or 0.2%, to close at 76,499.63, while the NSE Nifty gained 90 points, or 0.4%, to end at 23,176.05. Market capitalization of BSE-listed companies soared by ₹6 trillion, reaching an impressive ₹423 trillion.

Domestic investors stepped in heavily, offsetting foreign portfolio investor (FPI) outflows. Optimism was further supported by global reports suggesting that the U.S. President-elect's economic team is exploring a gradual tariff hike strategy to mitigate inflation risks.

Broad-Based Gains Amid FPI Selling

Despite the uptick, FPIs remained net sellers, offloading ₹8,132 crore—their highest single-day selling since November 28, 2024. In contrast, domestic institutional investors bought shares worth ₹7,901 crore, providing a much-needed cushion.

Notably, the gains extended across broader markets, with the Nifty Midcap 100 rising 2.5%, recovering from its worst single-day drop since June 2024. The Nifty Smallcap 100 also gained 1.98%, as advancing stocks outnumbered decliners on the BSE by 2,823 to 1,144.

HDFC Bank and SBI led the gains on Sensex, rising 0.87% and 2.5%, respectively.

Analysts' Take on the Market

Vinod Nair, Head of Research at Geojit Financial Services, said, “The easing of domestic CPI inflation and global market recovery brought relief to broader indices. While this may provide the Reserve Bank of India some room in its upcoming policy, factors like rising oil prices and higher bond yields remain key concerns.”

Ajit Mishra, SVP-Research at Religare Broking, urged caution. “This rebound was driven by oversold conditions, offering an opportunity for participants to trim positions, especially in mid and smallcap segments. Weakness in IT and FMCG sectors indicates that broader market pressure persists. A stock-specific approach and robust risk management are crucial in this environment.”

Factors Shaping Sentiment

The upcoming Union Budget and corporate earnings for the December quarter will be critical in determining market direction. While Tuesday's rally offered a breather, investors are advised to tread carefully amid ongoing global and domestic uncertainties.

Key Takeaways:

Sensex rose 170 points; Nifty gained 90 points.

Market capitalization of BSE-listed firms surged to ₹423 trillion.

FPIs sold ₹8,132 crore, while domestic institutions bought ₹7,901 crore.

Broader market indices, including midcaps and smallcaps, witnessed robust gains.

Analysts suggest a cautious, stock-specific approach.