The Indian stock market experienced a strong recovery on Wednesday, with the Sensex surging over 800 points. The rally was driven by positive performances in the financial and pharmaceutical sectors. HDFC Bank and ICICI Bank were among the top gainers in the financial sector, each posting around 2% gains.
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In the pharmaceutical sector, Dr. Reddy’s Laboratories and Cipla led the surge with increases of 3% and 2.5%, respectively. Analysts attributed the market rebound to positive earnings reports and improved global market trends.
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Ankit Banerjee, a market analyst at XYZ Securities, said, “The positive quarterly results from key companies have boosted investor confidence. Additionally, easing global concerns over inflation contributed to the overall positive sentiment.”
However, domestic brokerage Kotak Institutional Equities cautioned that the recent sharp rally does not adequately reflect underlying challenges.
Sensex climbs amid financial, pharma gains
These challenges include global trade uncertainties, limited progress in India-US trade talks, a weakening earnings outlook, and stretched valuations. Foreign Institutional Investors (FIIs) recently dealt a substantial blow to the market with withdrawals amounting to Rs 10,000 crore. The key concern is whether FIIs will continue to exit Indian equities, potentially negating the recent gains.
Moody’s Ratings stated on Wednesday that India is well-positioned to handle the adverse effects of U.S. tariffs and global trade disruptions. The agency noted that domestic growth drivers and low dependence on exports provide a solid foundation for the economy. In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite Index, and Hong Kong’s Hang Seng were trading positively, while Japan’s Nikkei 225 Index was quoted lower.
U.S. markets ended in the red on Tuesday. The global oil benchmark Brent crude rose by 1.62 percent to USD 66.44 a barrel.