Indian stock markets staged a strong rebound on Tuesday, with the benchmark indices Sensex and Nifty closing over 1.5 per cent higher, supported by a rally in information technology (IT) stocks amid optimism over corporate earnings.
The Nifty 50 gained 358.60 points, or 1.60 per cent, to settle at 22,721.95. The BSE Sensex advanced 1,109.10 points, or 1.54 per cent, to close at 73,033.78.
IT stocks led the rally, with the Nifty IT index climbing more than 5 per cent as investors responded to optimism surrounding HCL Technologies' earnings.
Vikram Kasat, Chief Business Officer – Advisory and Dealing at PL Capital, said Indian equities witnessed a strong recovery, led by IT stocks.
"The nearly 4.7 per cent surge in the Nifty IT index suggests that investors are selectively positioning themselves around earnings visibility rather than buying across the market," Kasat said.
On the National Stock Exchange (NSE), all sectoral indices ended in positive territory except Nifty Pharma, which declined 0.05 per cent.
Nifty Realty gained 2.48 per cent, while Nifty IT advanced more than 5 per cent. Nifty FMCG rose 1.40 per cent, Nifty PSU Bank climbed 1.46 per cent, Nifty Auto gained 1.23 per cent, Nifty Metal advanced 1.17 per cent and Nifty Media rose 0.55 per cent.
Kasat noted that India VIX declined by around 8 per cent, indicating easing near-term uncertainty. However, weakness in small-cap stocks suggested that investor risk appetite remained uneven.
He also cautioned that elevated crude oil prices and September retail inflation of 5.54 per cent could limit policy flexibility and put pressure on corporate margins.
"Going forward, sustained earnings growth and broader sectoral participation will be crucial to extending the rally; investors should favour fundamentally strong companies and avoid aggressive bets at elevated valuations," he said.
Riyank Arora, Associate Vice President – HNI & Derivatives at Hedged.in, said the Nifty had reclaimed the 22,700 mark and was trading above key support levels, indicating continued bullish momentum.
He identified immediate support at 22,650–22,600, followed by a stronger support zone near 22,450. On the upside, he placed resistance at 22,800–22,900, adding that a decisive move above this range could pave the way for further gains.
Meanwhile, Brent crude was trading at USD 104.55 per barrel at the time of filing this report. Gold stood at Rs 1,49,535 per 10 grams for 24-karat purity, while silver traded at Rs 2,22,849 per kg.
Rajeev Sharan, Head of Research at Brickwork Ratings, said the rupee extended its recovery for a second consecutive day on Tuesday, trading in the mid-95s after recording a near-1 per cent gain on Monday, its biggest single-day rise in more than six months.
He attributed the rebound to changes in the Reserve Bank of India's dollar supply mechanism and tighter restrictions on currency derivatives.
"The rupee extended its rebound for a second day on Tuesday, trading in the mid-95s, after Monday’s near-1 per cent jump, its biggest single-day gain in over six months. The driver is not fresh inflows but the RBI rerouting dollars going out. Its new window now supplies state oil companies their full daily needs, about USD 300 million, directly, taking the market’s biggest and least price-sensitive buyer off the spot screen. It has also sharply cut currency derivative limits to squeeze speculators," Sharan said.
Asian markets largely closed lower. Japan's Nikkei 225 fell 1.93 per cent to 67,721, while Taiwan's weighted index declined 1.99 per cent to 48,341. South Korea's KOSPI dropped 5.78 per cent to 6,035.
In contrast, Singapore's Straits Times index gained 0.28 per cent to close at 5,430, while Hong Kong's Hang Seng index rose 0.20 per cent to 24,319.