Stock Market Recovery Fueled by Positive Global and Domestic Signals: Analysts
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Synopsis
On March 8, the Indian stock market rebounded strongly, gaining nearly 2 percent after three weeks of losses. Analysts attribute this recovery to favorable global cues, including delayed US tariffs, a weaker dollar, and domestic liquidity support from the RBI.
Key Takeaways
- Indian stock market rebounds after three weeks of losses.
- Key drivers include global sentiment and domestic liquidity.
- Nifty and Sensex show significant recovery.
- Investors are advised to maintain a cautious yet positive outlook.
- Market conditions depend on earnings recovery and global developments.
Mumbai, March 8 (NationPress) Following three weeks of declines, the Indian stock market staged a remarkable recovery, concluding the week with an approximate 2 percent increase.
This resurgence was fueled by supportive global and domestic factors, enhancing investor confidence. The Nifty finished at 22,552.50, while the Sensex closed at 74,332.58, indicating a notable rebound.
Market analysts noted that key catalysts included an improved global sentiment due to reports of a postponement in US tariffs and the potential for renewed negotiations, which contributed to the stabilization of financial markets.
Moreover, a weaker dollar and a reduction in crude oil prices further elevated investor confidence, according to Ajit Mishra, SVP, Research at Religare Broking Ltd.
On the local front, the Reserve Bank of India (RBI)'s decision to inject additional liquidity into the market further enhanced the positive trend.
“The interplay of these elements resulted in a widespread rally across sectors, with metal, energy, and pharmaceutical stocks standing out as the leading gainers. Broader indices also experienced impressive gains, climbing between 2.6 percent and 5.5 percent,” Mishra stated.
Krishna Appala from Capitalmind Research remarked that the market's strength was bolstered by a comprehensive recovery, with Nifty 50 stabilizing at fair valuations, while mid and small-cap stocks attracted continued investment following recent corrections.
“Large-cap stocks seem well-positioned, with Nifty 50's P/E ratio below 20x, consistent with historical averages. Corporate balance sheets remain robust, and a 10-12 percent year-on-year earnings growth is anticipated to provide stability,” Appala added.
Maintaining this rally hinges on earnings recovery and the broader market sentiment.
Although large caps are in a favorable position, the wider market may stabilize unless earnings growth accelerates, experts noted.
The upcoming trading week will be shortened due to holidays, with market participants closely observing global developments in light of the absence of significant domestic events.
Key aspects to monitor include updates on tariff negotiations, geopolitical tensions, and their effects on the US dollar and crude oil prices, experts advised, recommending that investors adopt a positive yet cautious stance given the current circumstances.
