Stock market today: Sensex, Nifty snap 2-day losing streak; here's why

Benchmark stock indices Sensex and Nifty snapped their two-day losing run on Tuesday, as investors judged the recent selloff as unjustified. Wall Street indices settled mixed overnight, following a strong rally in recent days, and the dollar index has also come off from recent highs. This has raised hopes that the pace of foreign outflows from emerging markets, including India, may slowdown. Concerns over the recent subdued earnings, fears of a potential US-China trade wars and a slowing China, though remains persisting concerns.  

Investors were keenly awaiting the two-day US Federal Open Market Committee (FOMC) meeting starting today and the Union Budget 2025 on February 1.

At 9.17 am, the BSE Sensex was trading 368.91 points or 0.49 per cent higher at 75,735.08. Nifty was trading at 22,923.60, down 94.45 points or 0.41 per cent. The gains were led by banking names. Axis Bank climbed 1.74 per cent to Rs 964 and was the best Sensex performer. Tata Steel advanced 1.42 per cent to Rs 128.20 as a 36 per cent drop in Q3 consolidated PAT managed to beat Steet expectations. IndusInd Bank Ltd, Infosys and Bajaj Finance gained 1.3-1.5 per cent. HDFC Bank, ICICI Bank, Bajaj Finserv and Zomato also gained over 1 per cent each.

"The Indian market appears to be oversold and is set for a rebound. The RBI’s announcement of measures to boost the liquidity in the banking system by around Rs 1.5 trillion is positive for the market. This raises the prospects of a rate cut by the MPC in the February policy meeting. Banks are likely to benefit," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services:

After the recent correction, the domestic market is now trading at valuations, which are in line with the past 10-year average. Investors can utilise the opportunity to buy fundamentally strong high quality stocks. The outperformance of largecaps over mid-and smallcaps is a healthy trend," Vijayakumar said. 

He noted that DeepSeek impact on the US stock market in general, and the US tech stocks in particular, has turned out to be a reality check for the overvalued stock market. In the medium-term this is likely to have a sobering effect on markets, globally, he said.