Buy-on-Dips Strategy Thriving in Indian Stock Market Following Significant Rebound
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Mumbai, Dec 14 (NationPress) The recent rally in the Indian stock market on Friday enabled the benchmark indices to finish the week on an optimistic note. A substantial rebound of 2,000 points from the lows indicates that the buy-on-dips strategy is proving effective in the market, specialists noted on Saturday.
“With inflation now falling within the RBI's comfort zone and expectations of a further decline in food prices due to seasonal adjustments in vegetable costs, this may foster expectations for a monetary policy easing in February,” stated Vinod Nair, Head of Research at Geojit Financial Services.
During the last trading session of the week, the Nifty experienced a remarkable recovery of over 2 percent from its day’s low, bouncing back from a considerable dip earlier in the session, ultimately closing with gains of 220 points at 24,768 (+0.9 percent).
Support from buying in FMCG, IT, and banking stocks aided the recovery, even as the broader market sentiment remained cautious.
“The intraday sell-off in Indian stocks followed weakness across Asian markets, which experienced significant declines amid a stronger dollar, rising US Treasury yields, and ongoing skepticism regarding China’s economic recovery,” remarked Siddhartha Khemka from Motilal Oswal Financial Services Ltd.
The uncertainty surrounding China’s stimulus initiatives affected metal stocks, causing the Nifty Metal index to drop by 0.7 percent.
On Friday, the Sensex rose by 843.16 points or 1.04 percent, reaching 82,133.12. During the session, the BSE benchmark hit an intra-day high of 82,213 after recovering from a low of 80,082.
Midcap and smallcap stocks lagged behind largecaps, with the Nifty midcap 100 index closing at 58,991, down 30 points or 0.05 percent, while the Nifty smallcap 100 index finished at 19,407, down 59 points or 0.30 percent.
Experts indicate that a gradual recovery in IIP and core sector data is pointing towards improved earnings performance in the second half compared to the subdued first half of FY25.
Currently, it is believed that FII selling has decreased, at least in the short to medium term, which will further enhance market sentiment, they added.
The Nifty IT index reached a new peak and surged around 3 percent during the week after US inflation data met expectations, raising hopes for a Fed rate cut next week.
Simultaneously, gold experienced a significant sell-off as profit-taking escalated following mixed signals from US economic data. MCX Gold plummeted from Rs 79,000 to Rs 77,450. The current weakness suggests a possible trading range of Rs 76,000–Rs 78,000 in MCX, with a cautious short-term outlook amid ongoing market volatility.
