Indian equity markets recovered modestly on Thursday after the recent sell-off. At around 10:40 am, the Sensex was up 0.16% at 74,452.88, while the Nifty 50 gained 0.26% to 23,279.45. Buying in banking and financial stocks helped the benchmarks, while easing crude prices are the key factors that provided some relief. However, the recovery remains cautious due to the US Fed’s rate hike and elevated oil prices.

1. Bargain Buying After Recent Fall

Investors are using the recent correction to selectively buy stocks at lower levels. The Sensex and Nifty have fallen nearly 5% over the previous five weeks, leaving several stocks at relatively lower valuations. This has triggered short-covering and bargain buying, helping the benchmarks recover for a second consecutive session.

2. Banking Stocks Support the Market

Banking and financial stocks are among the key drivers of today’s recovery. The Nifty Bank, financial services and PSU banking indices were trading higher, with investors finding support in major lenders. Fourteen of the 16 major sectoral indices were in positive territory, while mid-cap and small-cap indices also gained around 0.7%.

3. Crude Oil Prices Ease

Brent crude slipped to around $106 a barrel after Saudi Arabia offered additional crude cargoes to Asian refiners through Oman. The move has reduced some immediate concerns over supply disruptions. Lower crude prices provide some relief to India because high oil costs can increase the import bill and put pressure on inflation and the rupee.

4. Auto and Metal Stocks See Buying

Buying in auto and metal stocks is also supporting the broader market. Moneycontrol reported that these sectors were among the main contributors to the early recovery. The India VIX also declined around 4% to 12.64, indicating lower near-term market volatility.

5. Market Holds Above Key Support

The Nifty is holding above the 23,200 level, which is an important technical zone after the recent decline. Analysts are watching the 23,100-23,070 area as the next major support, while 23,400-23,500 remains the immediate upside zone.

Key Technical Analysis

Sensex Technical Outlook

The Sensex is trading around 74,450 after recovering from recent lows. Immediate support is placed around 74,000, while 74,700-75,000 could act as resistance. Holding above 74,000 can keep the recovery attempt alive, but the broader trend remains cautious as the index is still well below recent highs.

Nifty 50 Technical Outlook

The Nifty is holding above 23,200, keeping the current recovery intact. The immediate resistance is around 23,400-23,500, while 23,100-23,070 remains the key support zone. A break below 23,070 could increase selling pressure towards 23,000.

Bank Nifty Technical Outlook

Bank Nifty remains under pressure despite today’s recovery. The immediate support is around 55,700-55,600, while 56,700-57,000 is the important resistance zone. A sustained move above 57,000 would improve the short-term setup, while a break below 55,600 could extend the decline.

Today’s Key Takeaway

Today’s recovery is being supported by bargain buying, banking stocks, easing crude prices and lower volatility. However, the US Fed’s 25-basis-point rate hike, a weaker rupee and crude above $105 remain major concerns. The Nifty’s ability to hold 23,200 and move towards 23,400-23,500 will be important for the next phase of trading.

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