Indian Stocks Rebound To Post Gains After Turbulent Session

Building on the morning's progress, Indian stocks ended Wednesday's trading day in positive territory. Following a significant downturn in the previous session, marked by a Sensex drop of over 1,000 points, several factors such as inflated valuations, recent withdrawals of funds by foreign portfolio investors, and some profit-taking contributed to the market turbulence.

The benchmark Sensex and Nifty ended the day with gains of approximately 1 per cent. The Sensex closed at 71,060 points, up 689 points, while the Nifty closed at 21,453 points, up 215 points. Within the Nifty 50 stocks, 43 saw an increase in value, while 7 experienced a decline.

Ajit Mishra, senior vice president, Technical Research, Religare Broking, said, "Markets took a breather after Tuesday's slide and gained nearly a percent amid volatility. The tone was negative at the beginning however rebound in the select heavyweights not only capped the decline but also helped the Nifty to close in the green."

"We thus feel traders should continue with a stock-specific trading approach and maintain positions on both sides," Mishra added.

According to Jaykrishna Gandhi, head, Business Development, Institutional Equities, Emkay Global Financial Services, "We expect the domestic and FPI volumes to remain tepid during the truncated week (markets will be closed on January 26 for Republic Day), as most long-only investors to stay defensive and wait for clear trading trends to emerge in the last week of January. The coming week will also be event heavy with multiple results and the interim budget on Thursday 1st Feb."

Foreign portfolio investors have shifted from buying to selling in the Indian stock market in January 2024, following a trend of actively acquiring domestic stocks in the preceding months of November and December.

"However, over the medium term we expect flows to pick up gradually, given the inflation stability and expected political steadiness post-elections," said Gandhi.

The most recent information from the National Securities Depository Limited (NSDL) indicates that Foreign Portfolio Investors (FPIs) offloaded Indian stocks amounting to Rs 19,308 crore in January.

On Wednesday, Zee Entertainment Enterprises' shares rebounded by more than 6 per cent after plunging by 30 per cent and hitting the lower circuit in the previous session due to the collapse of the merger deal with Sony Pictures. The lower circuit represents the lowest price at which a company's stock can be traded during a specific session.

On Monday, Sony Pictures ended the USD 10 billion merger agreement with Zee Entertainment Enterprises and also requested a USD 90 million termination fee from the Indian company. ZEEL firmly refutes all the allegations made by Culver Max and BEPL regarding the supposed violations of the MCA terms, as well as their demands for the termination fee.

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