Indian equities staged a strong recovery on Tuesday amid expectations of stimulus measures from China and short covering ahead of the US election results.
The Sensex closed at 79,476, gaining 694 points or 0.88 per cent, while the Nifty advanced 0.91 per cent to end at 24,213. The recovery came after Monday’s decline, with markets showing resilience despite uncertainty surrounding the US presidential election.
Metal and banking stocks led the rally. JSW Steel was the top Nifty gainer, up 4.6 per cent, followed by Tata Steel at 3.7 per cent and Hindalco at 3.5 per cent. The sector’s strong performance was attributed to positive developments in China’s steel sector. Bank Nifty climbed 992 points or 1.94 per cent to 52,207.
“China’s national steel PMI increased by 5.6 points to 54.6 in October and returned to expansion territory for the first time after March 2023. This led to buying interest in metal stocks,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
FPIs on selling spree
FPIs continued their selling spree on Tuesday, offloading shares worth Rs 2569 crore.
“The domestic market experienced a sharp recovery amid uncertainty surrounding the likely downgrade in Q2 GDP forecast and closely contested US presidential election. However, the recent rebound in domestic manufacturing activity data, along with the expected revival of consumption in H2, are likely to support market sentiment,” said Vinod Nair, Head of Research, Geojit Financial Services.
Most Asian markets rose Tuesday, while Europe’s indices flirted between gains and losses as investors gauged a slew of downbeat earnings. Hong Kong and Shanghai each climbed more than two per cent each after data showed China’s services sector expanded last month at its fastest pace since July. China is expected to pump in $140 billion in extra budget spending.
