New Delhi [India], February 4 : The Indian stock market soared on Tuesday, closing sharply higher as Sensex surged 1,397.07 points to end at 78,583.81, while Nifty jumped 378.20 points to close at 23,739.25.
Investor sentiment improved significantly, with 39 Nifty stocks advancing and 12 declining. Among the top gainers in the Nifty 50 were Shriram Finance, Larsen & Toubro (LT), Bharat Electronics Limited (BEL), IndusInd Bank, and Adani Ports. On the other hand, Trent, ITC Hotels, Britannia, Hero MotoCorp, and Nestle India were the top laggards.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the sharp rally to improving global market sentiment.
He said, "Yesterday, the Indian market struggled to absorb the optimism generated by the good union budget due to heightened geopolitical risks stemming from 'Trump tariff war'. However, India could outperform in a weak global market, and as a rebound has been triggered in the global sentiment, it has fuelled a sharp surge in domestic equities."
"While overall market sentiment remains positive, large-cap stocks are the preferred choice. Meanwhile, banking stocks are rallying in anticipation of a rate cut in this week's RBI policy, the new governor's first meet," he explained.
Despite the stock market's strong performance, concerns remain over macroeconomic factors. The Indian rupee hits a low of 87.15, raising concerns about inflation and economic stability.
Meanwhile, foreign institutional investors (FIIs) have been selling heavily, offloading Rs5,285 crore worth of equities in the cash segment over the last three sessions. In contrast, domestic institutional investors (DIIs) bought shares worth Rs3,532 crore.
According to VLA Ambala, SEBI-registered Research Analyst and Co-Founder of Stock Market Today, rising crude oil prices and continued FII selling could impact India's GDP growth and manufacturing sector. However, she advised long-term investors to focus on fundamentally strong companies with profitable Q2 and Q3 results.
She said, "The continuous selling of FIIs due to macroeconomic factors could slow India's GDP growth as inflation might rise, directly impacting manufacturing industries by increasing fixed costs."
Despite global uncertainties and currency concerns, the Indian stock market remains resilient. With improving investor sentiment, a possible RBI rate cut on Friday, and a focus on large-cap stocks, the momentum could continue in the upcoming sessions. However, experts advise investors to remain cautious and focus on long-term opportunities amidst market volatility.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor