Sensex, Nifty rebound: What's driving the recovery and what investors should watch next

Indian equity benchmarks recovered sharply on Wednesday, reversing most of the losses recorded in the previous session, supported by gains in banks, financials, information technology (IT) and realty stocks.

The 30-share BSE Sensex pack advanced 790.54 points or 1.04 per cent to close at 76,991.22, while the NSE Nifty50 index rose 197.55 points or 0.83 per cent to settle at 24,021.65.

According to Ajit Mishra, SVP (Research) at Religare Broking, the market witnessed a strong rebound after a subdued start, with the Nifty gradually gaining momentum through the trading session.

Sector-wise, banking and financial stocks led the gains, followed by IT and realty shares. However, energy, metal and auto stocks remained under pressure. Broader markets were relatively subdued, with midcap and smallcap indices ending only marginally higher.

Mishra attributed the recovery to a combination of domestic and global factors. "Positive remarks from the RBI Governor regarding the interest rate outlook led to strong buying in heavyweight banking and financial stocks. On the global front, a rebound in Asian markets following the previous day's sharp decline, along with positive developments regarding a potential US–India trade deal, provided additional support," he stated.

Ravi Singh, Chief Research Officer at Master Capital Services, said, "Domestic benchmarks witnessed strong buying interest today as investor sentiment improved significantly after easing geopolitical tensions in the West Asia. The recent progress in US-Iran negotiations helped cool crude oil prices, which came as a major positive for India."

He noted that lower crude oil prices are beneficial for India, a major oil importer, as they help ease inflation concerns and improve the economic outlook.

Singh also highlighted the return of foreign institutional investors (FIIs), who have been selectively increasing their exposure to Indian equities.

Ankur Punj, Managing Director and Business Head at Equirus Wealth, said, "The indices rebounded sharply despite mixed global cues, as investors cheered the news of several stranded ships passing through the Strait of Hormuz, which was reflected in a sharp fall in the crude oil prices."

He added that optimism surrounding progress in US–India trade discussions and recent FII buying also supported market sentiment.

Nifty: Key levels to watch

Osho Krishan, Chief Manager – Technical & Derivative Research at Angel One, said the Nifty continues to face resistance near the 24,100–24,150 zone.

"However, the recovery from the previous session's sharp decline reflects underlying resilience and sustained buying interest at lower levels," Krishan added.

He identified 23,900 as the immediate support level, followed by 23,780, which could provide stability during short-term corrections. On the upside, 24,150 remains the key resistance zone.