Tue Jan 07 18:36:10 UTC 2025: ## Indian Stock Market Rebounds After Monday’s Crash, but Volatility Remains

**MUMBAI, INDIA** – Indian stock markets staged a significant recovery on Tuesday, rebounding from a sharp decline in the previous session. The benchmark S&P BSE Sensex gained 254.11 points to 78,219.10 by 11:20 am, while the NSE Nifty50 climbed 115.75 points to 23,735.10. Broader market indices also saw gains.

Despite the early recovery, market analysts warn of continued volatility. Several factors are contributing to the uncertainty, including significant foreign institutional investor (FII) selling, a strengthening dollar, upcoming Q3 earnings reports, and the anticipated release of the first GDP advance estimates for FY25, which economists predict could show a four-year low in growth.

Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., attributed Monday’s decline to persistent FII selling, totaling Rs 2,575 crore (approximately $310 million USD), pushing the Nifty below its 200-day moving average. He cited record-low rupee levels, rising oil prices, and elevated US Treasury yields as key catalysts for the volatility. He advised investors to remain cautious.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, suggested that Monday’s 1.6% drop in the Nifty was an overreaction to concerns over the HMPV virus. He highlighted that while FII selling was substantial, it was offset by domestic institutional investor (DII) buying. He believes the correction was driven by short selling, and that government reassurances regarding the virus could lead to a market rebound, particularly in momentum stocks. He suggested that investors could use the dip to acquire fundamentally strong, beaten-down stocks in the automobile and financial sectors.

Experts caution that the market remains susceptible to further fluctuations, particularly given pending US employment data and upcoming Q3 results from major companies like TCS. Investors are urged to exercise caution and seek professional financial advice before making investment decisions.

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