Markets recover from early losses, IndusInd Bank plunges 27% 

Markets staged a remarkable recovery Tuesday, closing nearly flat despite opening sharply lower following weak global cues, while IndusInd Bank shares crashed after revealing significant accounting discrepancies in its derivatives portfolio.

The benchmark Sensex ended marginally lower by 12.85 points or 0.02 per cent at 74,102.32 after falling as much as 371 points in early trade. The broader Nifty index managed to close in positive territory, gaining 37.60 points or 0.17 per cent to finish at 22,497.90.

IndusInd Bank was the centre of attention as shares plummeted 27.06 per cent to a 52-week low of ₹656.80 after the lender disclosed inconsistencies worth ₹15.3 billion in its derivatives portfolio, representing about 2.35 per cent of its net worth. Market analysts anticipate this could result in a loss of approximately ₹1,500 crore in Q4FY25, significantly impacting the bank’s profitability and credibility.

“Despite the shaky start, Nifty demonstrated resilience, erasing losses and trending higher throughout the session,” said Sundar Kewat, Technical and Derivatives Analyst at Ashika Institutional Equity.

Retail stocks led the gainers, with Trent surging 4.13 per cent to ₹4,998. Other top performers included BPCL (+3.02 per cent), Sun Pharma (+2.82 per cent), BEL (+2.49 per cent), and ICICI Bank (+2.41 per cent).

Besides IndusInd Bank, other notable losers included Infosys (-2.02 per cent), Bajaj Finserv (-1.75 per cent), M&M (-1.66 per cent), and Power Grid (-1.35 per cent).

The market breadth remained negative with 2,506 stocks declining against 1,466 advances on the BSE. A concerning 233 stocks touched their 52-week lows compared to just 60 hitting yearly highs.

Sectoral performance was mixed, with the realty index emerging as the top performer, rallying 3.75 per cent. Nifty Midcap Select gained 0.42 per cent and Nifty Financial Services rose 0.64 per cent, while Nifty Bank fell 0.75 per cent due to the IndusInd Bank selloff.

Bhavik Patel, Senior Research Analyst at Tradebulls Securities, noted, “Market opened on negative note mirroring the moves from global markets with gap down. Value buying emerged immediately and Nifty recovered fairly well from the opening’s low. However banking index underperformed substantially on account of sharp fall in Indusind bank stock.”

The Indian rupee strengthened against the dollar, gaining 0.15 to close at 87.24. Jateen Trivedi, VP Research Analyst at LKP Securities, attributed this to “weaker crude prices and a soft dollar index. Additionally, the secondary market showed resilience, with a recovery in the index after a weak opening, which helped sustain rupee gains.”

Gold prices continued their upward trajectory, gaining ₹450 to reach ₹85,900 in MCX and rising $14 to $2,911 in COMEX. Trivedi explained this was due to “dollar index weakness and escalating tariff concerns in the US signalled economic uncertainty. Safe-haven buying remained strong, with ETF inflows supporting the bullish sentiment.”

The global backdrop remained challenging, with U.S. markets experiencing significant declines due to recession fears and trade tensions. Vinod Nair, Head of Research at Geojit Financial Services, commented, “Despite significant selloffs in the U.S. and other Asian markets driven by concerns over an economic slowdown caused by the ongoing trade war, the domestic market is showing signs of a gradual recovery.”

Technically, the market appears poised for potential upside. Rupak De, Senior Technical Analyst at LKP Securities, observed, “The sentiment remains positive for the very short term, supported by strong momentum in the RSI indicator and the index closing above the 50 EMA on the hourly timeframe. In the very short term to short term, the index might continue its strength with the potential to reach 22,660–22,700.”

Shrikant Chouhan, Head Equity Research at Kotak Securities, added, “We believe that as long as the market is trading above 22,300/73700, the short-term outlook remains bullish.”

Looking ahead, market participants will be closely watching upcoming inflation data. “This week, CPI data from both the US and India will be crucial for market sentiment. The expected trajectory of lower inflation at 2.9 per cent vs. 3.0 per cent in the US and 4.0 per cent vs. 4.31 per cent in India suggests a mildly supportive environment,” noted Trivedi.