Both Sensex and Nifty staged a sharp rebound on October 28, with Sensex rising 400 points from the day's low and Nifty reclaiming 25,900. This market recovery was powered by five key catalysts that combined global optimism and domestic strength.moneycontrol+2
Key Reasons for Market Recovery
1) US Federal Reserve Rate Cut Expectations
Investors turned optimistic amidst strong signals that the US Fed may reduce interest rates by up to 25 basis points in its upcoming policy meeting. Lower US rates generally boost global liquidity and favor investment flows into emerging markets like India, underpinning today’s rebound.timesofindia.indiatimes+1
2) Progress in US–China Trade Talks
Reports of "preliminary consensus" ahead of a high-level meeting between US and Chinese leaders improved global sentiment. Looming prospects for a trade deal reduced risk aversion and spurred FII inflows into Indian equities.moneycontrol+1
3) Soft US CPI Data
A softer US consumer price inflation print further strengthened expectations of monetary easing. This has heightened investor appetite for equities, as lower inflation diminishes the odds of aggressive rate hikes.moneycontrol+1
4) Strong Q2 Corporate Earnings
Better-than-expected quarterly results from large banks—such as HDFC Bank, SBI, and ICICI Bank—bolstered market confidence. Strong performances in banking, PSU, and financial sectors contributed to broad-based gains.businesstoday+1
5) Technical and Institutional Support
Technical indicators showed firm support for Nifty above 25,700, which prompted value-buying on dips. Additionally, foreign institutional investors turned net buyers in the previous sessions, providing ongoing market stability.moneycontrol+1
Sector and Broader Market Trends
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Broader market indices like Nifty Midcap 100 and Smallcap 100 outperformed, with robust participation across sectors.moneycontrol
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Value buying was evident in large-caps, especially in realty, metals, oil & gas.
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The market remains in “buy the dip” mode, with every corrective fall seen as an opportunity to build fresh positions.moneycontrol+1
Conclusion
The combination of global rate optimism, favorable trade outlook, solid earnings, and strong technical support aligned to trigger the latest market recovery. Going forward, the resilience in banking and recovery momentum will be closely watched for sustainability.
The equity benchmark indices rebounded sharply post noon on Tuesday, recovering from early losses as investors turned optimistic on expectations of a US Federal Reserve rate cut and progress in US–China trade talks.
The Sensex, which fell 551.18 points or 0.65 percent to an intraday low of 84,227.66, pared losses and was trading 84,670.93 around 1:30 pm, gaining over 400 points from the day’s low.
The Nifty also recovered after slipping to 25,826.15, down 140 points or 0.53 percent. It moved back above the 25,900 mark to trade at 25,944.65.
Tata Steel, JSW Steel and SBI Life Insurance Company were the top gainers in the Nifty50 pack, while the Tech Mahindra and Bajaj Finserv were major laggards.
Key drivers of market recovery
1) Fed rate cut expectations: Investors are tracking the outcome of the US Federal Reserve’s policy meeting, where policymakers are widely expected to reduce short-term interest rates by 25 basis points. Lower US rates typically improve global liquidity and make emerging markets like India more attractive for investment.
2) US–China trade optimism: Comments from officials in Washington and Beijing indicating a "preliminary consensus" ahead of a meeting between US President Donald Trump and Chinese President Xi Jinping helped improve sentiment. Both sides expressed confidence in progress toward a trade agreement.
