The restoration ended the longest shedding streak witnessed by benchmark Nifty 50, its worst in additional than 25 years. To make certain, doubts persist on whether or not that is simply small cheer in an general image of decline for the markets.
A number of international indices, together with Germany’s DAX, France’s CAC 40, Hong Kong’s Hold Seng, and Taiwan’s Weighted Index, additionally closed on a optimistic be aware, lifting investor sentiment within the home market as effectively.
After a tough month—the place Nifty Auto tumbled 12%, Nifty IT slid 11%, and Nifty FMCG dipped 9%—these sectors staged a powerful comeback on Wednesday, recording progress of two.6%, 2.1% and 1.5%, respectively.
Main the cost have been heavyweights like ITC (up 3.6%), Reliance Industries (1.3%), Mahindra & Mahindra (4.1%), Bharti Airtel (2.2%), and Infosys (up 1.1%).
In the meantime, the Nifty 50 rose 1.2% to 22,337.30 and the BSE Sensex gained 1% to 73,730.23. Nevertheless, it was the mid- and small-caps that stole the present. Nifty Smallcap 250 jumped 2.7%, and Nifty Midcap 100 surged 2.4% on Wednesday.
In accordance with provisional information from BSE, overseas institutional buyers (FIIs) offloaded ₹2,895 crore price of Indian equities, whereas home institutional buyers (DIIs) stepped in as internet consumers, buying ₹3,371 crore.
Specialists mentioned the return to inexperienced of the market on Wednesday factors to cut price shopping for, with buyers leaping in to seize shares on the downward curve.
Chirag Patel, CFA & Co-founder at ValueMetrics Applied sciences, mentioned that at current, the Nifty 50 has undergone a 16% value correction, however its valuation has dropped even additional—by 19%. The valuation drop, he mentioned, is because of each the latest value corrections and the earnings progress of belongings throughout this era.
Patel additional identified that since January 1999, Nifty 50 has skilled 11 corrections exceeding 15% up till March 2025. “Whereas value corrections are sometimes intently analyzed, valuation corrections are usually missed,” he mentioned.
‘Solely a aid rally’
Nirav Karkera, head of analysis at Fisdom, sees the present market upswing as extra of a aid rally. He believes the slowdown in company earnings progress—anticipated to final one other quarter or two—is already priced in.
At the same time as he remained sceptical concerning the rally’s sustainability, Karkera admitted that valuation considerations have eased to some extent, injecting a dose of confidence into the market.
One other issue driving the restoration may very well be FIIs closing their quick positions because the greenback tumbled to a three-month low, some market contributors mentioned. The Bloomberg Greenback Spot Index fell 0.6% on Wednesday to its weakest stage since 9 December. This drop comes at a time when there are lingering considerations concerning the unfavourable influence of US tariffs on the economic system.
Additionally, market chatter a couple of potential reduce in capital positive factors and securities transaction tax has sparked optimism, giving buyers an additional cause to cheer.
Whereas market corrections are a pure a part of the cycle, Vikas Khemani, founding father of Carnelian Asset Administration and Advisors, mentioned that markets at all times get better amid scepticism.
In accordance with Khemani, concern has gripped buyers—those that as soon as purchased on dips are actually promoting on rallies. In consequence, he believes restoration would possibly take a few months, and earlier than that, we may see redemptions.
A glimmer of restoration may very well be rising as earnings upgrades begin to trickle in.
As per a JM Monetary report dated 5 March, in February 2025, 12 Nifty 50 corporations that make up 24% of the index, noticed an improve in FY26 earnings per share (EPS) estimates. This included insurance coverage (the place 1 of two Nifty 50 corporations noticed EPS upgrades), metals & mining (2 of 5 corporations), and utilities (1 of two corporations), the report highlighted.
In the meantime, Chris Wooden, international head of fairness technique at Jefferies, believes {that a} threat of additional correction continues. The true concern is that if the market doesn’t rebound inside three months, buyers may begin seeing year-on-year losses of their portfolios and that will be a much bigger threat, he instructed Mint in a latest interplay.
Whereas India has already skilled a considerable correction that contributed to the slowdown, he sees the larger risk now looming from exterior forces—notably the US.
One other crucial variable? The greenback. He expects a peaking of the greenback. “But when I’m mistaken on the greenback, it’s going to be extra unfavourable not only for Indian equities however for all rising markets,” he mentioned.
