Indian equity benchmark indices, Sensex and Nifty, staged a notable recovery on November 19, following several days of downward pressure.
As of 12:26 pm IST, the Sensex had surged by 1,044.65 points (1.35%), while the Nifty gained 295.05 points (1.26%). The rebound was driven by value buying at lower levels, solid performances from blue-chip stocks, and favorable global trends.
DIIs played a pivotal role in supporting the market, offsetting the impact of FIIs selling, while public sector enterprises (PSEs) also saw significant gains.
Nifty and Sensex Recover From Oversold Territory
Over the past two sessions, the Nifty index’s RSI dipped below 30, signaling oversold conditions. According to analysts, such conditions typically precede a short-term market rebound.
Analysts caution that the recovery comes amid lingering concerns, including high valuations, moderating earnings, and ongoing FII outflows, which suggest that the market’s near-term outlook remains cautious.
Public Sector Stocks
The Nifty PSE index, which tracks 20 state-run enterprises, rose by 2.11%, with all its constituents in the green. Currently, it is trading at 9,821.75, up by 1.73% as of 12:48 pm IST, reflecting strong momentum in public sector enterprises.
Public sector companies are often viewed as more stable investments during periods of volatility, and their strong performance was a key factor in the market’s rebound.
FII Selling vs. DII Buying
In Monday’s trading session, a noticeable shift occurred in the buying and selling dynamics between FIIs and DIIs. While FIIs sold shares worth Rs 1,403.40 crore, DIIs took the opportunity to buy stocks worth Rs 2,330.56 crore, creating a net positive effect.
While FII selling typically diminishes as the calendar year closes, the possibility of tariffs under a new U.S. administration remains a concern for emerging markets. Experts believe the sharp FII selloff could be largely over.
Global Factors
The global markets also saw positive movement on November 19, as U.S. bond yields eased and the dollar retreated from multi-month highs.
Investors appeared optimistic about potential Federal Reserve policy changes and President-elect Donald Trump’s upcoming cabinet appointments, providing additional support to global and Indian equities.
Stock-Specific Performance
Among the 30 stocks that make up the Sensex, Mahindra & Mahindra, Adani Ports, Tata Motors, and Infosys led the gains, while Bajaj Finserv and Kotak Mahindra Bank saw losses.
Rupee Shows Stability Amid Dollar Weakness
The Indian rupee remained largely unchanged at 84.4000 against the U.S. dollar by 12:36 pm IST. This stability resulted from a balance of dollar demand from foreign banks and importers, while a weakening dollar against regional currencies provided additional support.
Outlook
Although the market’s rebound offers some relief, challenges remain. Analysts point to high valuations, the possibility of tariff changes under Donald Trump’s administration, and continued foreign outflows as risks to future performance.
Some analysts believe the recent correction has priced in much of this uncertainty, signaling a potential stabilization in the near term.
The current market recovery underscores the importance of strong domestic support, robust sectoral performance, and global optimism in navigating potential headwinds.
Disclaimer – The information provided in this article is for informational purposes only and does not constitute financial or investment advice. MarketScope Daily is not registered with SEBI, and the analysis shared here reflects general market observations and trends. Readers are advised to consult with a financial advisor or conduct their own research before making any investment decisions. Market investments are subject to risks, including market volatility and potential loss of principal. Past performance is not indicative of future results.
