Indian equity markets staged a strong recovery on Friday, September 4, after four straight sessions of losses. The Sensex jumped over 500 points, while the Nifty 50 moved above the 23,950 mark in morning trade. At around 10 am, the Sensex was up 535.88 points at 76,688.74, while the Nifty gained 81.55 points to 23,955. Positive global cues, easing concerns over US rate hikes and buying in heavyweight stocks are the key factors that supported the recovery.

1. Fed Rate-Hike Bets Ease

One of the biggest reasons behind today’s rally is the change in expectations around US interest rates. Federal Reserve Governor Christopher Waller said he would support keeping rates unchanged at the upcoming meeting if inflation data continues to show improvement. His comments reduced expectations of an immediate rate hike and helped global markets recover.

2. Positive Global Market Cues

Asian markets opened mostly higher after Wall Street ended the previous session with strong gains. The Dow Jones rose more than 600 points, while lower US Treasury yields improved investor risk appetite. This positive global mood provided support to Indian equities after the recent sell-off.

3. Buying in Heavyweight Stocks

Several large-cap stocks supported the market recovery. Trent, Reliance Industries, Adani Ports, Bajaj Finserv and BEL were among the stocks contributing to the early gains. The rebound in large-cap shares helped lift the Sensex and Nifty after both benchmarks faced heavy selling pressure during the previous four sessions.

4. Strong Domestic Institutional Buying

Domestic institutional investors continued to provide support to Indian equities. DIIs bought shares worth around Rs 4,977 crore on Thursday, while FIIs remained sellers with net selling of around Rs 2,346 crore. Strong domestic buying is helping absorb some of the pressure created by foreign fund outflows.

5. Rupee Strength Provides Relief

The Indian rupee strengthened to around Rs 94.59 against the US dollar, supported by strong capital inflows and RBI intervention. The currency has also benefited from a weaker dollar globally. However, the rise in crude oil prices remains a concern because India depends heavily on imported oil.

Key Technical Analysis

Sensex Technical Outlook

The Sensex has bounced sharply from recent lows and is trading near 76,700. The immediate support zone is around 76,200-76,300, while resistance is likely near 77,000-77,200. A sustained move above 77,200 could improve the short-term trend and bring further buying. However, traders should watch crude prices and global cues as both remain important risks.

Nifty 50 Technical Outlook

The Nifty has reclaimed 23,950 after falling below 23,900 in the previous session. The immediate support is placed around 23,800, while 24,050 is the first major resistance. A decisive move above 24,050 could strengthen the recovery towards 24,200-24,300. If the index slips below 23,800, selling pressure could return.

Bank Nifty Technical Outlook

Bank Nifty is expected to remain an important driver of the broader recovery. The index is attempting to recover after recent weakness, with buying returning to major banking stocks. The 57,000-57,200 zone remains an important support area, while 57,700-58,000 could act as resistance. A sustained move above 58,000 would improve the short-term outlook for banking stocks.

Today’s Key Takeaway

Today’s rally provides some relief after four consecutive sessions of losses. Easing Fed rate-hike expectations, stronger global markets, domestic institutional buying and gains in heavyweight stocks have improved sentiment. However, crude oil remains close to $96 a barrel and US-Iran tensions continue to create uncertainty. For the Nifty, holding above 23,800 and reclaiming 24,050 will be important for the next move.

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