Stock Market Update – After enduring significant losses in recent trading sessions due to uncertainty surrounding Trump’s tariffs and persistent selling by foreign institutional investors (FIIs), India’s benchmark indices, Sensex and Nifty50, rebounded on Wednesday, March 5, 2025. This recovery provided much-needed relief to investors following a prolonged losing streak.
Market Performance Overview
The Sensex surged 0.84 percent, or 619.33 points, to reach 73,609.26. The Nifty50 climbed 0.96 percent, or 213.7 points, to close at 22,296.35. If the Nifty sustains these gains through the close, it will officially end its 10-session losing streak.
On the Bombay Stock Exchange (BSE), stocks like Mahindra & Mahindra (M&M), Tata Steel, Power Grid, and Adani Ports led the recovery, recording gains of up to 3.5 percent. On the National Stock Exchange (NSE), top gainers included M&M, Tata Steel, Trent, and Eicher Motors, each adding up to 3.5 percent.
Top Contributors to Market Recovery
Several key stocks played a major role in pushing the indices higher. On the BSE, Kotak Mahindra Bank, M&M, Bajaj Finance, Tata Motors, and Zomato saw high trading volumes, indicating strong investor interest. M&M, Infosys, Bharti Airtel, and Reliance Industries contributed significantly to the Sensex’s upward movement.
Factors Driving the Market Rebound
Analysts largely attribute this market recovery to a natural rebound after an extended period of decline. Independent analyst Ambreesh Baliga described the rally as a “pullback” rather than a sustained trend reversal. Investors saw the previous session’s decline as an opportunity to buy stocks at lower prices, leading to renewed demand and a price surge.
Additionally, developments on the international trade front provided some relief to market sentiment. Reports indicating a potential rollback of tariffs on Canada and Mexico signaled that the measures could be short-lived. Canadian Prime Minister Justin Trudeau publicly criticized the tariffs, calling them “very dumb” in direct remarks to former U.S. President Donald Trump. Mexico’s President, Claudia Sheinbaum, announced that her government would soon release countermeasures, further suggesting that ongoing negotiations could lead to a resolution.
Furthermore, market optimism increased with speculation that Ukrainian President Volodymyr Zelensky might return to the negotiation table for a possible compromise, reducing geopolitical tensions and boosting global sentiment.
Banking Sector Leads the Recovery
Strength in the banking sector played a crucial role in the market’s rebound. Ajit Mishra, Senior Vice President (SVP) of research at Religare Broking, highlighted the importance of defending the 21,800-22,000 support zone over the past two sessions. The banking sector’s resilience and a rebound in select heavyweight stocks fueled the upward momentum.
Kotak Mahindra Bank and Bajaj Finance saw increased buying interest, further driving overall market strength. The banking sector’s leadership in the rally indicates that investors are willing to re-enter the market after assessing recent losses.
Skepticism Over Sustainability of the Rally
While the market posted strong gains, some analysts remain cautious about the sustainability of this recovery. Ravi Singh, SVP of retail research at Religare Broking, pointed out that major U.S. indices, including the Dow Jones and Nasdaq, closed in negative territory on Tuesday. This global trend suggests that Indian markets may struggle to maintain upward momentum in the coming sessions.
Singh also noted that today’s movement primarily stemmed from investors buying at lower levels. Without strong fundamental triggers or policy changes, this rally may not sustain beyond the immediate short term. Traders and investors must closely monitor upcoming global and domestic developments to assess whether the positive sentiment holds.
Looking Ahead: What to Expect?
As markets recover, several factors will influence whether this rebound extends or remains short-lived:
- Global Trade Developments – Any concrete announcements regarding U.S. tariffs on Canada and Mexico will shape investor sentiment. If these tariffs remain temporary, markets could see further upside.
- Geopolitical Stability – Continued discussions around a compromise in the Russia-Ukraine conflict could ease investor concerns, boosting confidence in global equity markets.
- FII and Domestic Investor Activity – Foreign institutional investors have been net sellers in recent sessions. A shift in FII behavior toward buying could signal stronger market stability. Meanwhile, domestic institutional investors and retail investors will play a critical role in maintaining liquidity and supporting the uptrend.
- Banking Sector Performance – The banking sector’s leadership in today’s rally highlights its importance in driving overall market sentiment. Any further strength in banking stocks will be key to sustaining gains.
- Global Market Cues – Indian markets remain closely tied to global equity trends. Any sharp correction in U.S. or European markets could impact domestic stocks, while positive global developments would further support the recovery.
Conclusion
The Indian stock market’s rebound on March 5, 2025, provided much-needed relief to investors after an extended period of decline. Sensex and Nifty50 surged due to a combination of bargain buying, renewed confidence in the banking sector, and positive global trade developments. However, analysts remain divided on whether this recovery will sustain in the long term.
While optimism surrounds the market’s ability to reclaim higher levels, investors must stay vigilant. Upcoming global economic events, trade negotiations, and domestic policy decisions will play a key role in determining whether this rally extends or remains a temporary relief.
For now, traders and long-term investors alike can take this recovery as an opportunity to reassess their portfolios and position themselves for upcoming market movements. The next few sessions will be crucial in deciding whether Indian markets maintain their upward momentum or face another round of selling pressure.
