Investors gain Rs 6 lakh cr as Sensex rises 900 pts, Nifty closes above 24,750; what's next?

The Indian equity market rose after four sessions of losses on Thursday. The reversal in Sensex and Nifty came in line with a recovery in the global equity markets. Sensex rose 900 pts to close at 80,015 and Nifty added 285 pts to settle at 24,765. Market cap of BSE-listed firms rose by Rs 6 lakh crore to Rs 452.96 lakh crore. 

Adani Ports, L&T, NTPC, Reliance, BEL and IndiGo were the top Sensex gainers rising up to 4.51% on Thursday. On the other hand, Tech Mahindra, HCL Tech, HUL, ICICI Bank, SBI and Infosys were the top losers, falling up to 1.30%. Of 30 Sensex stocks, 19 ended higher. 

As many as 66 stocks hit their 52-week highs today. On the other hand, 381 shares fell to their 52-week lows.

Hitesh Tailor, Technical Research Analyst at Choice Broking said, "The cooling in volatility, with India VIX easing from elevated levels, suggests that a significant portion of the geopolitical risk premium had already been priced in during the earlier decline.

From a derivatives standpoint, the bounce is largely supported by short covering and improving options positioning. The Nifty Put–Call Ratio had slipped to lower levels, reflecting excessive pessimism, which typically triggers a tactical pullback. As the index held above crucial support zones around the 24,100–24,300 range, fresh put writing and unwinding of bearish positions emerged, indicating traders’ confidence that immediate downside may remain limited."

India VIX, the volatility index, of the Indian stock market fell 15.55% to 17.85 in the current session as bulls attempted a recovery on D Street. Often referred to as the "fear index," it gauges investor sentiment and fear, helping traders predict potential market swings. 

Shrikant Chouhan, Head Equity Research, Kotak Securities said, "A bullish candle on daily charts indicates that a pullback formation is likely to continue in the near future. For traders, 24,600/79500 and 24,500/79200 would act as key support zones. Above these levels, the market could continue its positive momentum up to 24,950-25,000/80500-80700. On the flip side, below 24,500/79200, the sentiment could change. Below this level, traders may prefer to exit their long positions."

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said, "A long bull candle was formed on the daily chart with gap up opening. Technically, this market action indicates a formation of bullish candle pattern like 'morning star'-not a classical one. Formation of such pattern after a reasonable down trend or at the supports indicates possible bottom reversal pattern. The sharp downward correction in the market seems to have reversed on the upside with the formation of short-term bottom reversal pattern on Thursday. Further sustainable up move from here could pull Nifty towards the next resistance of 25000 in the near term. Immediate support is placed at 24500."