The Indian stock market experienced a volatile day on Wednesday, with investors making a strong comeback after an initial decline. The BSE Sensex closed at 83,734.25, up 283.29 points (0.34%), while the NSE Nifty rose 93.95 points (0.37%) to reach 25,819.35. While banking and metal stocks dominated buying, the IT sector saw heavy selling due to rising AI pressure. Let’s explore the real reasons behind this exciting market turn and the status of the stocks that have raised investors’ hearts.
How did the tables turn after the initial decline
When the market opened on Wednesday morning, investors were a little nervous. The previous two days’ gains seemed to be coming to a halt, as the Sensex and Nifty slipped into the red in early trading. However, a “magical last-hour buy” changed the market’s course. Midcap and smallcap indices also saw a surge in buying, with the Nifty Midcap 100 gaining 0.5% and the Smallcap 100 gaining 0.54%.
Who shone and who fell
Among the 30 Sensex stocks, Tata Steel, ITC, Axis Bank, Mahindra & Mahindra (M&M), and L&T delighted investors, rising by up to 2.90%. This surge in banking and financial stocks was driven by expectations of stable asset quality.
On the other hand, IT sector giants had a nightmare day. Stocks like Tech Mahindra, Infosys, TCS, and HCL Tech saw sharp declines. Experts believe that increasing margin pressure due to artificial intelligence (AI) and global disruptions pushed the IT index down.
Why did the market suddenly surge
According to Vinod Nair, Head of Research at Geojit Investments Limited, this market recovery is primarily driven by “widespread buying.” The third-quarter (Q3) results of Nifty 500 companies were in line with expectations, a testament to the strong state of the Indian economy. Selective buying in the FMCG sector also supported the Nifty. Notably, 112 stocks have surpassed their 52-week highs, a clear indication that bulls remain dominant in the market for the long term.
These stocks are showing Negative signals.
While the market is setting records, Negative sentiment has intensified in some stocks. Stocks like Eternal, Tech Mahindra, Bharat Seats, and Brainbees Solutions have already begun to decline. These stocks appear to be technically weak, so retail investors are advised to exercise caution here.
Top Gainers
E2E Networks
Netweb Technologies
Godfrey Phillips
EaseMyTrip
Akash Infra
What is the right strategy for investors
The market currently appears to be in a ‘buy on dips’ mode. The surge in the banking and metal sectors indicates a recovery in domestic demand. However, it would be wise to wait before investing in the IT sector as uncertainty regarding AI persists. If you are a long-term investor, keep an eye on companies that have strong quarterly results.
