Markets Rebound in Early Trade After Two Days of Decline; Sensex Jumps Over 500 Points

Mumbai, May 29, 2025 — Indian equity benchmarks opened on a strong note Thursday, staging a sharp rebound after two consecutive sessions of decline. The BSE Sensex soared over 500 points in early trade, while the NSE Nifty 50 surged past the 22,700-mark, riding on gains in banking, IT, and auto sectors.

This positive opening comes as a relief to market participants who have been watching global uncertainty, profit-booking, and domestic fund outflows weigh heavily on the indices over the past couple of sessions.

Market at Open: Bullish Sentiment Returns

At 9:35 AM IST, the Sensex was up 534.72 points or 0.73%, trading at 72,380.21, while the Nifty 50 gained 157.80 points or 0.70% to touch 22,732.10.

Market breadth remained firmly positive with 46 of the 50 Nifty stocks in green. All sectoral indices, barring FMCG and Pharma, opened with gains.

Top Gainers on Nifty 50 (9:45 AM):

Global Cues: Wall Street Strength, Asian Markets Supportive

Global sentiment played a crucial role in Thursday’s rebound. Overnight, U.S. equity markets closed higher after economic data indicated cooling inflation, strengthening the case for a possible Fed rate pause in the upcoming FOMC meeting.

• Dow Jones Industrial Average rose 0.81%

• NASDAQ Composite gained 1.20%

• S&P 500 advanced 0.95%

Asian markets mirrored Wall Street's strength, with the Nikkei 225, Hang Seng, and Kospi all trading in the green during early hours.

Sectoral Overview: Banks and IT Drive the Charge

Banking and IT stocks emerged as the biggest contributors to the morning rally, rebounding strongly after recent profit-booking:

• Nifty Bank rose 1.2%, driven by heavyweights like HDFC Bank, Axis Bank, and Kotak Mahindra Bank.

• Nifty IT gained over 1.5%, led by TCS, Infosys, and Wipro amid stable dollar and global tech optimism.

• Nifty Auto was also in the green, with Tata Motors and Bajaj Auto continuing their upward momentum.

FMCG and Pharma remained under slight pressure, with selective selling seen in Hindustan Unilever, Dabur, and Dr. Reddy's.

Why the Rebound? Key Factors Behind the Early Rally

The rebound appears to be supported by a confluence of domestic and global factors:

 1. Cooling Inflation Data (US & Domestic)

Recent CPI data in the U.S. showed signs of softening inflation. In India too, April CPI eased to 4.83%, bolstering expectations of a rate-hold by the RBI in its upcoming policy meet.

 2. Strong Institutional Buying

After two days of outflows, preliminary data shows Foreign Institutional Investors (FIIs) net buyers of ₹658 crore on Wednesday, adding to confidence in the equity markets.

 3. Short-Covering Rally

The steep correction in the last two sessions led to oversold conditions, prompting short-covering by traders, especially in financials and IT counters.

 4. Stable Rupee and Crude Prices

The Indian Rupee stabilized around 83.12 against the US Dollar and Brent crude prices eased to $80.91 per barrel, providing macroeconomic support.

Expert Take: Is This Rally Sustainable?

Vikas Jain, Technical Analyst at a Mumbai-based brokerage:

“Today’s move is largely technical in nature. The Sensex has bounced from its 50-day moving average, which acted as a strong support. However, global volatility and election-linked uncertainty remain key overhangs.”

Shraddha Ghosh, Economist:

“Markets seem to be breathing easy after cooling inflation figures and hints from the Fed minutes that suggest a patient approach to future hikes. If this trend continues, we may see more sustained inflows.”

Midcap and Smallcap Rally: Participation Widens

• Nifty Midcap 100 gained 0.95% in early trade.

• Nifty Smallcap 100 rose 0.83%.

Broader market participation is seen as a healthy sign, suggesting investor appetite beyond just index heavyweights.

Notable Midcap Movers:

Technical Indicators: Support & Resistance Levels

• Nifty 50 immediate resistance: 22,800 – 22,900

• Nifty 50 support: 22,500

• Sensex resistance: 72,650

• Sensex support: 71,800

Traders will be watching for closing levels near resistance zones, which could trigger further momentum if breached convincingly.

F&O Data: Put Writers Gain Control

Options data suggests a bullish undertone:

• Maximum open interest on the call side is at 23,000, while puts see the highest build-up at 22,500.

• This indicates a bullish bias, with strong support near current levels.

Key Events to Watch This Week

• India’s GDP data for Q4 FY24 (due May 31)

• US PCE inflation figures (due June 1)

• RBI Monetary Policy review (next week)

• Corporate earnings from PSU banks, auto, and infrastructure sectors

Investor Outlook: Opportunity or Trap?

While Thursday’s rally brought temporary relief, seasoned investors remain cautious:

• Global headwinds: Geopolitical uncertainty, US debt ceiling negotiations, and interest rate outlook continue to linger.

• Domestic triggers: Any negative surprises in GDP growth or monsoon projections could limit the upside.

• Volatility expected: Ahead of RBI policy, markets are likely to see heightened volatility with sectoral rotation.

Rebound Brings Optimism, But Stay Alert

Today’s market rebound, led by large-cap buying and positive global cues, signals that investor sentiment is recovering — at least in the short term. The key, however, lies in sustained participation, institutional inflows, and macroeconomic stability.

As Sensex surges past the 72,300-mark and Nifty trades above 22,700, the next few sessions will reveal whether this is a short-lived bounce or a genuine trend reversal.

Disclaimer: This article is for informational purposes only and not a recommendation for buying or selling any securities. Please consult a certified financial advisor before investing.