Sensex 750-Point Rally: 6 Drivers Behind Nifty's 24,000 Reclaim

The Sensex surged 750 points Tuesday, pushing the Nifty above 24,000 for the first time in a week. The rally snapped a three-session losing streak that had erased roughly ₹5 lakh crore in market value.

Six factors drove the rebound, traders said.

Crude oil prices dropped sharply. Brent fell below $72 a barrel, its lowest in three weeks, after OPEC+ signaled it would proceed with a planned output increase in April. Lower crude costs ease India's import bill and improve margins for oil-dependent sectors like aviation and paints.

Foreign portfolio investors turned net buyers after a stretch of selling. Provisional data showed FPIs bought ₹1,200 crore in equities Tuesday, reversing a ₹3,800 crore outflow over the previous two sessions. The buying concentrated in financials and IT, two sectors that had led the recent decline.

The rupee stabilized near 86.50 against the dollar after the Reserve Bank of India intervened through sell-buy swaps, three currency traders said. A steadier rupee reduces uncertainty for foreign investors calculating returns in dollar terms.

Domestic institutional investors continued their buying spree. Mutual funds and insurance companies bought ₹2,100 crore in equities, extending a pattern that has absorbed FPI selling for most of the year. DII inflows have averaged ₹1,800 crore per session in March, exchange data showed.

Short covering added to the upward momentum. The Nifty's put-call ratio had fallen to 0.85 on Monday, its lowest in a month, indicating bearish positioning. Tuesday's rally forced traders who had sold futures to buy them back, amplifying the move.

Technical factors also played a role. The Nifty bounced off its 200-day moving average near 23,600, a level that has acted as support in four previous pullbacks this year. The index closed at 24,080, up 3.2% from the intraweek low.

HDFC Bank contributed 120 points to the Nifty's gain, rising 2.8% after the stock found support near its 50-day moving average. The bank's Alpha Score of 43 reflects mixed momentum, Tuesday's volume was 1.5 times the 30-day average, suggesting institutional accumulation.

Infosys added 45 points, climbing 2.1% as IT stocks rebounded from oversold levels. The stock carries an Alpha Score of 57, indicating moderate momentum. Wipro rose 1.8%, with an Alpha Score of 46.

The broader market participation was broad. The BSE midcap index rose 1.9% and the smallcap index gained 2.1%, outperforming the benchmark. Advancing stocks outnumbered decliners by a ratio of 3:1 on the BSE.

Traders said the sustainability of the rally depends on whether FPI buying continues. The next test comes Wednesday, when the monthly U.S. consumer price index print is due. A hot number would reinforce the case for the Federal Reserve to hold rates higher for longer, potentially reversing the risk-on flow into emerging markets. A soft print would revive bets on a September cut, traders said.

The Nifty's next resistance sits at 24,300, the level it failed to hold on March 3. Support remains at the 200-day moving average near 23,600.