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The Indian stock market experienced a notable turnaround during midday trading on Monday, following a challenging week. Both the Sensex and Nifty indices posted impressive gains, signalling a shift in investor sentiment.
At the time of reporting, the Sensex had surged by over 1,100 points, while the Nifty had climbed approximately 300 points. This upward trend is particularly encouraging for traders and investors who have been navigating a volatile market recently.
According to Ajay Bagga, a banking and market expert, the recent rally can largely be attributed to short covering ahead of the upcoming monthly expiry on Thursday, October 31st. He explained, "Indian markets are seeing a mild bounce today. The reason could be short covering going into the monthly expiry on Thursday. Traders typically prefer to carry over long positions rather than shorts. Additionally, the selling pressure from Foreign Institutional Investors (FIIs) in the derivatives market appeared to ease by the end of last week. Any reduction in FII selling could lead to a bounce in the markets."
Experts believe that the midday rally indicates a potential shift in market sentiment, with renewed buying interest emerging as FII selling pressure decreases. Shriram Subramanian, Founder and Managing Director of InGovern Research Services, commented, "This seems like a dead cat bounce amidst the continuous selling by FIIs. India is still relatively overvalued compared to other markets, particularly China. However, we are witnessing some stock-specific buying as domestic investors continue to target shares in strong companies."
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Among the companies listed on the Nifty, 38 stocks advanced while 12 experienced declines. The top gainers at midday included Shriram Finance, Adani Enterprises, ICICI Bank, Mahindra & Mahindra (M&M), and IndusInd Bank. Conversely, the leading losers were Coal India, Bharat Electronics Limited (BEL), SBI Life, Tech Mahindra, and Axis Bank.
The positive performance of key banking and finance stocks suggests a resurgence of investor confidence, potentially setting the stage for further gains as the week unfolds.
With the monthly expiry approaching and reduced FII selling activity, traders and investors will be closely monitoring the markets for signs of sustained momentum in the coming days. As per ANI reports, the current trend may indicate a cautious optimism among market participants, eager for more stability in the stock market.
(With inputs from ANI)
