Stock market closing: Sensex jumps 650 pts, Nifty settles at 25,683; what drove the surge?

Indian equity benchmarks staged a decent recovery on Monday, snapping a two-session losing streak. The 30-share BSE Sensex pack jumped 650.39 points or 0.79 per cent to close at 83,277.15, while the NSE Nifty50 index climbed 211.65 points or 0.83 per cent to settle at 25,682.75.

The rebound extended beyond frontline indices. Nifty Midcap 100 advanced 0.48 per cent and Nifty Smallcap 100 rose 0.11 per cent, reflecting improving risk appetite in broader markets.

Banking, power stocks lead recovery

"After a range-bound opening, domestic markets edged higher, supported by renewed buying interest in banking and power stocks. The power sector gained on expectations of sustained demand momentum, while improved loan growth and stable asset quality bolstered confidence in banks. Globally, a continued decline in the US 10-year yield following benign inflation data strengthened expectations of a Fed rate cut later this year, with investors now closely awaiting the upcoming Fed minutes for further direction. Meanwhile, stability in the INR and range-bound crude oil prices ahead of US–Iran talks are offering additional support to domestic equities," said Vinod Nair, Head of Research at Geojit Investments.

Kranthi Bathini, Equity Strategist at WealthMills Securities, noted that after a sharp decline in IT stocks, a selective recovery is now visible in the segment. He added that gains in banks, financials, metals, consumer and pharma stocks also supported the market's upmove.

Technical rebound from key support levels

"After witnessing a sharp downward move last week, the Indian benchmark indices exhibited a value buying from lower level. Nifty prices rebound from the proximity of rising trendline support, aligning around 25,300-25,400 zone, which also coincides a horizontal support zone. The index has reclaimed its short term EMA cluster, including the 21 and 55 EMA, signaling strengthening near term momentum and improved price structure. Immediate resistance is placed in the 25,800-26,000 band, a sustained breakout above 26,000 could open room for an extension toward 26,200-26,300. However, inability to hold above 25,400-25,300 support zone may trigger renewed corrective pressure," said Ravi Singh, Chief Research Officer at Mastertrust.

Medium-term trend remains constructive

"From a medium-term standpoint, the broader trend remains constructive as Nifty continues to trade above its 50 and 200 DMA, maintaining a well-defined higher high, higher low sequence. The primary uptrend remains intact unless 25,000 is decisively breached on a closing basis. Dips toward the 25,500–25,300 demand zone are likely to attract buying interest," he added.

"Sectorally, banking, financial services, energy and PSU banks are witnessing relative strength and accumulation. Metals and FMCG display a neutral-to positive setup, while IT and realty continue to underperform with supply emerging on rallies. Overall bias remains cautiously bullish, favouring a buy on dips approach," Singh further stated.