The Indian stock market closed Monday’s session, October 26, with solid gains, snapping a four-day losing streak as key indices recovered sharply from their intraday lows. A strong rebound in financial stocks, along with a rally in technology and metal stocks, supported market sentiment.
Global sentiment also turned favourable for bulls as crude oil prices eased from last week’s highs, providing some relief from inflation concerns.
The Nifty 50 opened lower at 22,524, and the sell-off accelerated at the opening bell, dragging the index towards 22,387 before it staged a sharp recovery. Supported by gains in financial stocks, the index closed 0.68% higher at 22,735.
The Sensex also ended the session 0.66% higher at 73,606. Broader markets outperformed the benchmark indices, with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining 1.38% and 1.25%, respectively.
Vinod Nair, Head of Research at Geojit Investments, said Indian equities recovered from early losses, supported by value buying and strength in metals, power and healthcare. However, elevated crude prices, geopolitical uncertainty and caution ahead of the Fed, ECB and BoJ policy decisions kept sentiment measured.
Nair added that mid- and small-caps also witnessed some recovery after last week’s sharp correction, although investors remained selective, favouring earnings visibility and valuation comfort.
Bank stocks rebound as value buying returns
After slipping to a four-month low, the Nifty Bank index staged a strong rebound as value buyers stepped in. Kotak Mahindra Bank was the top performer in the pack, surging 2.4%, followed by Union Bank of India, IndusInd Bank and Federal Bank, all of which closed with gains of over 1%.
ICICI Bank recovered nearly 2% from the day’s low, while State Bank of India also rebounded by 2%.
Shrikant Chouhan, Head of Equity Research at Kotak Neo, said the benchmark indices witnessed a promising pullback rally. The Nifty ended 153 points higher, while the Sensex was up by 483 points. Among sectors, almost all the major sectoral indices traded in positive territory, but the Tourism, Healthcare and Metal indices outperformed, rallying over 2 percent.
Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, said pharma and healthcare led the recovery, supported by company-specific earnings and defensive demand in an uncertain macro environment.
Radhakrishnan added that select metal and banking stocks also rebounded from their intraday lows, while FMCG and IT stocks remained relatively subdued. The weaker participation from consumption stocks indicates that investors remain cautious about the effect of elevated energy costs on household demand and corporate margins.
Crude oil prices ease, but geopolitical risks remain
Brent crude fell towards $115 per barrel on Monday, retreating from multi-month highs despite concerns that strikes against Iran could resume following this week’s Israeli elections and next week’s US midterm elections. However, crude prices remain elevated, and the sustainability of the decline will matter more than a single-session correction.
Radhakrishnan said a sustained retreat supported by geopolitical de-escalation could broaden the equity recovery, while another supply-risk-led rise would renew pressure on consumption-sensitive and energy-intensive businesses.
He further added that the US 10-year Treasury yield remained elevated near 4.99%. With the Federal Reserve’s policy decision approaching, a further rise in yields or the dollar could restrict foreign participation in Indian equities.
Nifty technical outlook: Key support and resistance levels to watch
Shrikant Chouhan, Head of Equity Research at Kotak Neo, said that after an intraday dip, the market recovered sharply. From the day’s lowest point, the market rallied over 350/1000 points. On the daily charts, it formed a bullish candle, and on the intraday charts, it formed a promising reversal formation, which is largely positive. For traders, 22600/73000 and 22500/72800 would now act as key support zones.
Chouhan said that as long as the market is trading above the same, the pullback formation is likely to continue. On the higher side, 22800/73800 would act as an immediate resistance zone for the bulls. A successful breakout of 22800/73800 could push the market up to 23000/74500. However, below 22600/73000, the uptrend would become vulnerable. Below the same, traders may prefer to exit their long trading positions.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
