Markets Bounce Back After 4-Day Slide, Sensex Rises 317 Points On Easing Inflation

Mumbai: Indian stock markets rebounded sharply on Tuesday after a four-session losing streak, buoyed by easing retail inflation, steady foreign fund inflows, and positive global cues. The recovery was broad-based, reflecting improving sentiment across large-cap and broader market indices.

The benchmark BSE Sensex closed 317 points higher, gaining 0.39 per cent to end at 82,570.91. The NSE Nifty also posted a strong performance, climbing 113.5 points, or 0.45 per cent, to close at 25,195.8.

Market participants cited a favourable domestic inflation report, showing consumer prices at multi-year lows, as a key driver of Tuesday’s rally. Analysts believe this development increases the likelihood of a rate cut by the Reserve Bank of India, which could further boost economic growth.

Vinod Nair, Head of Research at Geojit Financial Services, said, “Domestic inflation has fallen to multi-year lows, strengthening expectations of a further rate cut by the RBI — potentially accelerating future economic growth, which is currently showing signs of improvement.”

The broader market also joined the rally, with the Nifty MidCap and SmallCap indices rising by approximately 0.95 per cent each, underscoring robust buying interest beyond the blue-chip stocks.

All sectoral indices on the Nifty 50 ended in the green, with auto stocks leading the gains. The Nifty Auto index rose 1.5 per cent, while the Pharma and Healthcare indices gained over 1 per cent each. Other sectors, including banking, energy, financial services, IT, metal, PSU banks, realty, consumer durables, and oil & gas, registered gains of up to 1 per cent.

Investor sentiment was further supported by a sharp drop in the India VIX — the volatility index — which fell 4.17 per cent to 11.48, indicating declining market fear.

The Indian Rupee also recovered after a two-day fall, aided by easing pressure from the US Dollar and strengthening confidence in domestic equity markets.

Meanwhile, market participants remained watchful ahead of key US inflation data, which could influence future Federal Reserve decisions and impact global market flows.

(With IANS Inputs)