Sensex Recovers From Day’s Low as Nifty Holds Above 24,150: What Is Supporting the Market?

Indian equity benchmarks staged a partial recovery during Tuesday’s trading session after beginning the day under pressure. The Sensex moved nearly 200 points higher from its intraday low, while the Nifty 50 climbed back above the 24,150 mark as investors stepped in to buy stocks that had seen sharp declines.

At around noon, the Sensex was trading at 77,345.28, down just 23.83 points, or 0.03 percent. The Nifty stood at 24,179.15, lower by 39.90 points, or 0.16 percent. The recovery came after both indices had recorded noticeably steeper losses earlier in the session.

Value Buying Helps Limit the Decline

One of the main factors supporting the rebound was buying interest at lower valuations. After the early sell-off pushed several stocks down, investors appeared willing to accumulate selected beaten-down counters.

The Sensex had earlier fallen to 77,125.91, a decline of 243.2 points, while the Nifty slipped to 24,115.45, down 103.6 points. The subsequent recovery suggested that some market participants viewed the initial weakness as an opportunity to enter stocks at more attractive levels.

However, the recovery remained measured rather than broad-based, indicating that investors were still cautious about taking aggressive positions amid several external and domestic uncertainties.

Foreign Investor Activity Turns Supportive

Foreign institutional investor flows also provided some relief to market sentiment. FIIs purchased Indian equities worth ₹1,181.66 crore on Monday, ending a two-session selling run.

The return of foreign buying was important because overseas fund flows have remained a closely watched factor for Indian equities. A sustained improvement in FII participation could provide additional support to benchmark indices, although one session of buying does not necessarily establish a longer-term trend.

Domestic investors therefore continued to watch whether foreign flows would remain supportive in the sessions ahead.

Asian Markets and US Futures Offer a Positive Signal

Global market indicators also helped improve sentiment during the Indian session. Several major Asian markets were trading in positive territory, including South Korea’s Kospi, China’s Shanghai Composite, Hong Kong’s Hang Seng and Japan’s Nikkei 225.

US stock futures were also indicating gains of as much as 0.6 percent. The stronger overseas backdrop reduced some of the pressure on Indian equities and encouraged investors to reassess their positions after the initial decline.

Still, global markets remain sensitive to developments in crude oil, geopolitical tensions and interest-rate expectations. These factors could continue to influence the direction of Indian equities.

Nifty Monthly Expiry Adds Volatility

Another important factor influencing trading activity is the monthly expiry of Nifty 50 derivatives contracts. Tuesday's expiry is particularly significant because it is the first monthly Nifty expiry under the new closing auction session mechanism for stocks with futures and options contracts.

The new system determines an equilibrium closing price through an auction. With market participants still adapting to the mechanism, trading around expiry could experience additional fluctuations, particularly if the auction book has relatively limited volume.

Traders are also looking ahead to the latest MSCI index reshuffle, which is scheduled to take effect after the market closes on August 31. The interaction between index-related flows and the new closing mechanism could become another source of market activity.

Technical Levels Remain Important

Despite the recovery from the day's low, technical levels remained a key focus for traders. Market strategist Anand James of Geojit Investments indicated that a move towards 24,400 could be possible if the Nifty manages to strengthen. At the same time, failure to sustain levels around 24,200, or a decline through 24,144, could increase downside pressure, with 24,060 identified as another support level.

These levels highlight the market's current uncertainty: buyers are attempting to defend lower levels, but the index has yet to demonstrate strong upward momentum.

Investors Remain Cautious

The Tuesday recovery comes after the Sensex and Nifty both closed lower on Monday. The Sensex declined 171.72 points, or 0.22 percent, to 77,369.11, while the Nifty lost 32.95 points, or 0.14 percent, ending at 24,219.05.

For now, the market appears to be balancing bargain hunting against broader concerns. FII activity, global market trends, derivatives expiry and important technical levels are likely to remain central to the next moves.

The recovery from the morning lows therefore offers some evidence of buying interest, but investors may continue to prefer selective positions until there is greater clarity on global risks and the market establishes a stronger directional trend.