Indian stock markets bounced back on Tuesday, ending a four-day losing streak. The surge was driven by a drop in retail inflation and a recovery in global markets. The BSE Sensex gained 169.62 points, or 0.22%, closing at 76,499.63. The index had earlier climbed by 505.6 points to hit 76,835.61. Meanwhile, the NSE Nifty rose 90.10 points, or 0.39%, settling at 23,176.05.
The easing of retail inflation provided a much-needed boost to investor sentiment. According to government data, December’s retail inflation fell to 5.22%, its lowest level in four months. This decrease was largely attributed to lower food prices, including vegetables. The inflation dip is expected to give the Reserve Bank of India more room to cut interest rates in its upcoming monetary policy review.
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Despite the positive inflation data, persistent selling by foreign investors and rising global crude oil prices continued to put pressure on the Indian markets. The last few sessions saw a significant drop, with the BSE Sensex losing 1,869.1 points, or 2.39%, in four days. However, the market rebounded thanks to a recovery in global equities.
Among the top performers in the Sensex pack, Adani Ports surged more than 5%. Other stocks such as NTPC, Tata Steel, Bajaj Finserv, Zomato, Bajaj Finance, Tata Motors, State Bank of India, IndusInd Bank, and Maruti also saw positive movement.
However, not all stocks had a good day. Hindustan Unilever, Titan, Tata Consultancy Services (TCS), Infosys, and UltraTech Cement ended in the red. HCL Technologies, in particular, saw a steep decline of over 8% following disappointing quarterly results.
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The Indian rupee also saw a recovery against the US dollar. After hitting an all-time low on Monday, the rupee strengthened by 8 paisa, closing at 86.62 against the greenback. This rebound was supported by the positive trend in domestic equity markets following the release of macroeconomic data.
The rupee had opened at 86.57 and touched an intra-day high of 86.45 before settling at 86.62. The previous day, the rupee had recorded its biggest one-day fall in nearly two years, losing 66 paisa and ending at its historic low of 86.70.
Despite the rupee’s recovery, it continues to face pressure from high global crude oil prices and ongoing foreign fund outflows. Crude oil prices have remained volatile, further complicating the outlook for the Indian currency.
The Indian stock markets showed resilience on Tuesday, supported by easing inflation and a global market recovery. However, challenges such as foreign selling and rising crude prices continue to weigh on the outlook. The rupee’s recovery from a record low offers some optimism, but risks remain in the form of external pressures.
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