Sensex recovers 650 pts from day's low, Nifty ends at 22,600: Key factors behind partial market rebound

Sensex rose 650 points from day's low while Nifty reclaimed the psychologically important 22,600-mark. In the 50-stock index, Eternal was the top gainer, up well over 2%. The stock likely got a boost after rival Swiggy's earnings for the September quarter disappointed the Street. Information technology majors, Infosys, HCL Technologies, and Tata Consultancy Services posted modest gains. Infosys is slated to report its earnings for the September quarter later in the day.

2) Buying in IT shares IT shares like TCS, Infosys were trading in green after a more than 2% drop in the Nasdaq composite index overnight. Meta shares lost nearly 8%, overnight on Wall Street, after the Facebook parent posted its first cash outflow in more than a decade due to its AI-related expenditure. Analysts view Indian IT stocks as a relative hedge against the global AI trade because they can benefit from companies' growing need for AI consulting, integration and managed-services work, while requiring far less upfront spending on data centres and chips than global hyperscalers.

Nifty needs to decisively trade below 22,400 for further bearishness to emerge in the market, said analysts. "Nifty is likely to extend the last three sessions corrective consolidation and trade in the range of 22,500-23,150. Index has support at 22,500-22,400 levels being the 80% retracement of the last two weeks pullback 22,180-23,175. A breach below 22,400 will negate the last two weeks pullback and open downside towards recent low of 22,180 levels.

"On the higher side immediate resistance is placed at 22,860 levels being the presence of 20 days EMA, while current week high of 23,175 is likely to act as major hurdle in the coming sessions," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking. "A move above yesterday’s high of 22,785 could indicate a short-term trend reversal and open the door for a recovery toward 23,175, the next key resistance. On the downside, 22,500 remains the immediate support," said Nandish Shah - Deputy Vice President, HDFC Securities.