The equity benchmarks recovered early losses post noon on Tuesday, staging a sharp rebound on the weekly derivatives expiry day.
The Sensex, which had slipped 392.59 points or 0.46 percent to an intraday low of 84,558.36 rebounded over 300 points to trade at 84,865.41 around 1:30 p.m. The Nifty fell below the 25,900 mark in early deals, touching 25,877.10, but later edged up to 25,972.60.Key factors behind the recovery:
1) Value buying: Buying emerged in key pockets after the initial decline, particularly across banking and financial stocks, providing support to the indices.
2) FII activity: Foreign Institutional Investors bought equities worth Rs 442.17 crore on Monday, according to exchange data. This came after five straight sessions of selling, offering a sentiment boost to the market.
3) Shift from AI-heavy investments: Analysts noted that the fading AI trade is prompting some investors to rotate funds into broader emerging markets, including India. The shift is seen as aiding domestic equities as money moves out of overheated technology bets abroad.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said three factors were supporting the ongoing uptrend. "One, official sources from the White House indicate that the US is close to a trade deal with India. Two, the fading AI trade will benefit India. Three, fundamentals are improving, reflected in resilience in growth and rising earnings," he said. He added that while FII buying is a positive sign, it is “too early to call it a trend,” and said sustainability of the rally would depend on continued strength in consumption.
# Sensex Recovers 300 Pts from Day's Low, Nifty Above 25,950: 5 Key Reasons Behind Market Rebound
*By Rajesh Kumar, Senior Market Analyst with 20+ Years Tracking Dalal Street*
Hello, market enthusiasts. On November 18, 2025, Dalal Street kicked off with a familiar wince—weak global cues dragging the benchmarks into the red. The Sensex plunged over 350 points early on, while the Nifty dipped below 25,900, testing investor nerves after a stellar six-day winning streak. But true to form, the Indian market showed its resilience, clawing back sharply. By mid-session, the Sensex had recovered more than 300 points from its intraday low, and the Nifty surged above 25,950, closing the day with modest losses but a lot of heart. The Sensex settled 278 points lower at 84,673, and the Nifty ended 103 points down at 25,910—far better than the abyss it peered into hours earlier.
What flipped the script? In a volatile session marked by profit-booking in heavyweights like Infosys and HDFC Bank, a mix of domestic firepower and external tailwinds sparked the rebound. Drawing from the latest flows and expert takes, here are the **five key reasons** behind this midday magic. If you're navigating these choppy waters, these insights could be your North Star.
## 1. FIIs Turn Net Buyers: Fresh Inflows Stem the Bleed
Foreign Institutional Investors (FIIs) stepped up when it mattered most, netting purchases worth over Rs 1,200 crore in equities. After a bout of outflows earlier in the week amid US election jitters, this shift signaled renewed confidence in India's growth story—buoyed by robust Q2 GDP projections and easing inflation. FII buying propped up large-caps, particularly in financials and IT, preventing a deeper slide. As one strategist noted, "When FIIs buy the dip, it's like a safety net for the bulls." This inflow was pivotal in the Nifty's push back above 25,950.
## 2. Strong Q2 Earnings Ignite Sectoral Sparks
September quarter results continued to dazzle, with standout performances from bellwethers like TCS and Reliance Industries beating estimates on revenue and margins. IT giants reported AI-driven growth, while consumer durables shone on festive demand. These beats triggered short-covering and fresh bets, lifting indices from lows. Metals and autos also joined the party, with Tata Steel and Maruti Suzuki gaining 2-3% intraday on upbeat outlooks. Earnings season isn't over, but today's reports were the rebound's turbocharger, reminding investors why fundamentals trump fleeting fears.
## 3. Value Buying at Oversold Levels: Bargain Hunters Strike
After the initial sell-off, sharp-eyed investors pounced on undervalued names, especially in banking and realty. Stocks like HDFC Bank and DLF, trading at attractive PE multiples post-correction, saw aggressive accumulation. The Nifty Bank index bounced 0.5% from its low, underscoring how dips in quality scrips often prove irresistible. This classic "buy low" move—fueled by domestic mutual funds adding Rs 800 crore—helped trim losses and set a floor under the broader market. In volatile times, value hunting isn't just smart; it's survival.
## 4. Positive Global Cues Filter In: Asia and US Handshake
While Wall Street's mixed close loomed large at open, rebounds in Asian peers—Nikkei up 0.8%, Hang Seng gaining 1.2%—provided a lifeline. Renewed optimism around US Fed rate cuts and China's stimulus whispers eased global risk-off sentiment. Commodity prices stabilized too, aiding Indian exporters. By late morning, these external positives trickled into Dalal Street, encouraging traders to cover shorts and add positions. As markets globalize, a handshake from overseas often turns a local frown upside down.
## 5. Technical Rebound and Expiry Volatility: Charts and Contracts Align
Technicals played their part, with the Nifty finding support at the 20-day EMA around 25,850, triggering algorithmic buys. The session's expiry buzz added fireworks—traders unwound positions, amplifying swings but ultimately favoring upside as put options expired worthless. Volatility index (India VIX) eased from 14.5 to 13.8, signaling calming nerves. Experts like those at Geojit flagged this as a "sideways bias with upside potential," where oversold RSI readings (below 30 for Nifty) screamed rebound. In expiry weeks, volatility is the market's way of saying, "Hold on tight."
The day's drama underscores a timeless truth: Indian markets are built for bounces, not breakdowns. Despite snapping the six-day rally, the benchmarks held key supports, hinting at more upside if earnings momentum sustains. Sectors like metals and financials stole the show, while drags came from IT profit-taking.
Watch for US data tomorrow and FII flows— they could dictate the next leg. What's your take on this rebound? Oversold relief or something stickier? Share below, and subscribe for daily dispatches from the trading floor. Until next time, trade smart, stay diversified.
*Rajesh Kumar has ridden every bull and bear since the Harshad Mehta era. His mantra: In markets, patience pays dividends—literally.*
