A sharp rally in Indian equities saw the Sensex surge 1,131 points to reclaim the 75,000 level on Tuesday, with Nifty jumping 1.45% amid strong global cues and heavy buying in market majors. But market experts warn that the bounce doesn’t signal a sustained recovery.
Gurmeet Chadha, Chief Investment Officer at Complete Circle, urged investors to avoid getting carried away by short-term swings. “Broader Markets lost 20%+ in 5 months & there was all gloom. A 2% move in a day & everyone is again positive. Well both r extreme emotions & shud be avoided,” he wrote on X.
He highlighted two key factors for a sustainable market turnaround: “10-year US yields shud drop 30-50 bps n come sub 4% n tariffs shudn't be very Punitive.” More importantly, he stressed that earnings must support the rally. “Most imp—Our earnings (Nifty EPS) need to grow double digit.”
Echoing this caution, CA Vivek Khatri said that market swings are often misleading. “Markets swing too much—fear when falling, euphoria after a small bounce. A 2% jump doesn’t mean the trend has changed.”
He outlined four conditions for a genuine market recovery: liquidity flow, solid earnings growth, real buying from foreign institutional investors (FIIs), and strength in small and mid-cap stocks beyond mere speculative moves.
Despite the day's surge, traders remain wary of external risks. Prashanth Tapse, Senior VP (Research), Mehta Equities, pointed to global challenges and fears of slowing domestic growth due to Trump’s threat to impose tariffs on key economies including India.
On Tuesday, the Sensex closed at 75,301.26, up 1.53%, while the NSE Nifty ended at 22,834.30, gaining 325.55 points. Market heavyweights ICICI Bank, Mahindra & Mahindra, Tata Motors, and L&T led the rally, while Bajaj Finserv, Bharti Airtel, Tech Mahindra, and Reliance Industries lagged.
Meanwhile, the small-cap and midcap indices jumped 2.73% and 2.10%, respectively, with broad-based buying across all sectors. “The Nifty Media, Realty, and Financial Services sectors led the charge, each advancing by more than 3%,” said Devarsh Vakil, Head of Prime Research, HDFC Securities.
Though global markets and declining crude oil prices have lifted sentiment, experts say the long-term trajectory will depend on US bond yields, FII activity, and corporate earnings growth — key indicators that investors are now closely watching.