Indian stock markets saw a rapid recovery on Wednesday, November 19, after an initial dip. Sensex surged by nearly 500 points from the day’s low. Meanwhile, Nifty crossed the 26,000 mark once again. The robust buying in IT shares and strong global cues improved investors’ sentiment. In the morning session, Sensex slipped to a low of 84,525.98 after dropping by 147 points. Nifty also fell below 25,900 before sliding to 25,856.20.
However, around 12:30 pm, the market showed a strong recovery. Sensex was trading at around 85,009.57 with an increase of almost 336.55 points or 0.4%. Similarly, Nifty surged back up above 26,009 with a gain of nearly 100 points.
The surge in the share market today was driven by 4 major reasons: 1) Strong buying in IT shares – IT companies’ shares witnessed a strong surge on Wednesday. Nifty IT index rose by more than 2% during trading. The surge in Infosys shares came as the company announced a buyback of shares worth Rs 18,000 crore starting from November 20.
2) Hopes for India-US trade deal – Investor sentiment received a boost when Commerce Minister Piyush Goyal hinted at a positive ‘development’ in the India-US trade pact soon, as long as the deal is ‘appropriate, fair, and balanced’ for both countries.
3) Signs of foreign investors returning – Market analysts suggest that investors worldwide are pulling out money from overvalued AI stocks and increasing investments in emerging markets, benefiting India. Dr. VK Vijayakumar, chief investment strategist at Geojit Financial Services, stated that a global ‘anti-AI trade’ has begun, with the decline in Nasdaq and better performance of markets like Korea and Taiwan signaling this trend.
4) Lower volatility – The volatility index (India VIX) fell by more than 2%, reaching 11.84, indicating reduced fluctuations in the stock market and boosting investor confidence.
Market strategist Anand James from Geojit Financial Services pointed out, ‘The jump around 25,900 support levels was in line with expectations. The range of 26,130-25,840 has become crucial for now. A closing above 26,022 could further strengthen the market. Important support for bears will remain between 25,840-25,822.’
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