Indian equity benchmarks staged a notable intraday comeback on Monday, snapping a streak of weakness as investor sentiment improved following comments on India-US trade engagement. Both the Sensex and the Nifty climbed off their session lows, aided by buying interest in heavyweight stocks and short-covering after last week’s sharp decline.
By early afternoon, the Sensex had erased nearly 900 points from its lows to trade near 83,751, while the Nifty recovered to around 25,747. The rebound came after markets slipped below key psychological levels earlier in the day.
Market participants cautioned that the recovery appears tactical rather than structural. Analysts noted that the bounce was largely fuelled by short-covering after indices slipped below the 25,500 mark on the Nifty.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said that aggressive selling in previous sessions had pushed markets into oversold territory, attracting bottom-fishing around key support zones. This, in turn, triggered short-covering in index heavyweights.
Investor mood also benefited from comments by US Ambassador to India Sergio Gor, who struck a positive note on ongoing trade discussions. Adding to optimism, Gor indicated that President Donald Trump could visit India within the next one to two years, raising hopes of improving bilateral ties.
This geopolitical undertone helped stabilize sentiment after five consecutive sessions of losses.
Despite the headline indices moving into positive territory, underlying market breadth remained weak a signal that the rally lacks broad-based participation.
Across major indices, declining stocks significantly outnumbered advancers:
- On the Nifty Midcap 100, nearly three-fourths of stocks were in the red
- The Nifty 200 saw more than 120 stocks trading lower
- In the Nifty 500, declines outpaced gains by nearly three to one
- Similar weakness was visible across the BSE 200 and BSE 500 indices
This imbalance suggests that sellers continue to dominate beneath the surface, even as benchmarks attempt a recovery.
Technical analysts remain cautious. Ruchit Jain, Vice President at Motilal Oswal Financial Services, pointed out that short-term momentum indicators have slipped into oversold zones, typically leading to brief pullbacks like the one seen today.
However, he emphasized that the Nifty has recently broken below its 50-day exponential moving average a key support level. For the rally to sustain, the index would need to reclaim and hold above this zone. Resistance is expected near the 25,900–26,000 range.
Adding to the cautious tone is the upcoming earnings season, particularly results from major IT companies such as TCS and HCL Tech. Ajit Mishra, Senior Vice-President (Research) at Religare Broking, noted that uncertainty around earnings may be prompting traders to book profits or reduce exposure.
He warned that the rebound should not be mistaken for a confirmed trend reversal, stressing that a sustained move above 25,600 is needed to validate any meaningful recovery.
The sharp intraday rebound comes after a punishing week for markets. Over the past five trading sessions, the Sensex has dropped more than 2,180 points, while the Nifty has shed over 645 points, reflecting persistent selling pressure.
