Indian Stocks Surge as US Recession Fears Fade | Market Recovery Boosts Investor Confidence

On Friday, Indian stock markets bounced back after concerns about a possible US recession eased. Investors showed renewed confidence, with foreign institutional investors (FIIs) buying stocks for the second day in a row and domestic investors supporting the market at lower levels.

Key Stocks

Key stocks like Reliance Industries, Infosys, Mahindra & Mahindra, State Bank of India, and HDFC Bank drove the Nifty index up by 250.50 points. Despite this recovery, the Nifty fell for the second week in a row, with analysts predicting that the index might consolidate at higher levels. The market is also watching ongoing developments in West Asia and waiting for new domestic triggers.

Nifty and Sensex

Both the Nifty and Sensex gained 1.04% each, closing at 24,367.5 and 79,705.91 points, respectively. The India Vix, a measure of market anxiety, dropped 7.45% to 15.34. Domestic institutional investors bought ₹3,979.59 crore worth of shares, while FIIs contributed ₹406.72 crore.

Sudip Bandyopadhyay from Inditrade Capital noted that while global uncertainties remain, the market’s recent pullback is healthy and could lead to a gradual rise within a range of 24,200-24,600 points in the coming week.

Surge in Nifty

In the past two months, the Nifty has surged 14.28% from 21,884.50 points to a record high of 25,010.90 on August 1. It has since dropped slightly by 2.6% due to negative global signals. Earlier in the week, US recession fears grew after unemployment figures for July reached a near three-year high. However, recent US data showing fewer people seeking unemployment benefits than expected helped lift market sentiment. The S&P 500 rose 2.3% to 5,319.31 points on Thursday, its best performance in three years.

Japan also contributed to the positive sentiment. The Bank of Japan’s decision not to raise interest rates helped the Nikkei 225 recover from a significant drop earlier in the week. Concerns about the yen carry trade, where investors borrowed cheap yen to invest in higher-yielding assets, had caused a market slump, but those fears have eased.

India’s Vix

India’s Vix fell from 20 to 15 during the week, reflecting reduced market caution and improved sentiment. So far this fiscal year, FIIs have invested ₹11,240 crore in India, while domestic investors have invested ₹1.75 trillion.

Another highlight was the debut of Ola Electric Ltd., which listed at ₹91.20 per share, a 20% premium over its issue price of ₹76. The company was valued at $4.8 billion by the end of the day. Ola Electric’s IPO included a fresh issue of shares worth ₹5,500 crore and a secondary sale of 84.9 million shares. Part of the proceeds will be used to expand its cell manufacturing plant.