Market rebound or relief rally: Sensex gains nearly 3,000 points in three days; should investors stay cautious?

Indian equity benchmarks continued their upward move for a third straight session on Wednesday, with the BSE Sensex adding nearly 3,000 points over the past three trading days, prompting debate on Dalal Street over whether the recent recovery marks a sustainable bottom or just a short-term bounce, according to an ET report. The NSE Nifty ended the session at 23,777 after trading within a band of 23,618 to 23,862, signalling a largely range-bound trend despite positive undertones. The Sensex, meanwhile, advanced more than 700 points during intraday trade, indicating persistent buying interest following the recent correction. Market participants attributed the rebound primarily to short covering and sectoral rotation after the sharp fall in benchmark indices earlier. Technology stocks remained at the forefront of the recovery. Jio Financial Services surged 4.6 per cent, while Tech Mahindra and Eternal gained around 3–3.5 per cent. At the same time, select defensive counters such as Cipla, Hindustan Unilever, and Coal India saw modest selling pressure, which restricted broader market momentum. Gaurav Garg of Lemonn Markets Desk said improving global cues and relative stability in crude oil prices — hovering close to $102 per barrel — supported sentiment. The easing of immediate inflation worries linked to volatile oil prices helped markets stabilise after recent geopolitical-led turbulence. Even as the benchmarks edged higher, technical signals suggested that investors should remain watchful. Vishnu Kant Upadhyay of Master Capital Services pointed out that the Nifty has been unable to sustain levels above 23,850, which continues to act as a key resistance zone. “The 23,850–24,000 band remains critical. Heavy call writing in this range is limiting upside momentum. A decisive breakout could push the index towards 24,200–24,300 levels, where the 21-day EMA is placed,” he said. Analysts also stressed that the current rally appears to be driven by opportunistic buying after the recent sell-off, rather than a clear shift in long-term trend. Vinod Nair of Geojit Investments said the recovery has been broad-based, led by IT, realty and auto stocks, with mid-cap and small-cap shares also participating. “The rebound has been broad-based, with leadership from IT, realty, and auto stocks, along with participation from mid- and smallcaps,” he noted. Despite the three-day upswing, underlying risks persist. Market experts flagged geopolitical tensions related to the Iran situation, elevated crude oil prices and weakness in the rupee as potential constraints on further gains in the near term. Global monetary policy cues also remain a key overhang. Investors are now focused on signals from major central banks such as the US Federal Reserve and the European Central Bank, which could influence liquidity conditions and foreign fund flows into emerging markets like India. From a structural perspective, the recent correction from around 26,350 to near 23,200 had pushed the Nifty into an oversold territory, making a technical rebound likely. However, sustaining momentum above critical resistance levels will be essential to confirm whether the market has indeed found a durable bottom.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)

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