Sensex jumps 2,000 points in 4 days. Key drivers for the rebound explained

 Sensex today rose over 600 points while Nifty50 was back above 16,500

Some analysts have advised cautious caution saying that selling may reemerge at higher levels.

Indian stocks markets today rallied on the back of positive global cues, extending the recent streak of gains to the fourth day. The Nifty was back above 16,500 while Sensex rose over 600 points. In four sessions, Sensex has rebounded over 2,000 points. Apart from positive global cues, the cut in windfall tax on oil producers and refiners boosted the Street's sentiment. The government also exempted petrol from an export levy less than a month after it imposed the two charges.

The changes will help companies such as Reliance Industries, Oil and Natural Gas Corp and Oil India Ltd, according to analysts. RIL shares were up about 3%.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the sharp pullback in Nifty from the June lows of 15183 is being aided by a flood of good news. “First, the US markets have rebounded sharply driven by impressive corporate earnings. Second, FPI selling appears to have bottomed out. The dollar index declining to 106.6 from above 108 is likely to persuade FPIs to buy rather than sell," he said.

FIIs have been net buyers of Indian equities in the past two sessions but so far in 202 2, foreign investors have made net sales of India shares totalling more than $30 billion.

"Results from the leading financials are likely to be good. After the recent correction IT valuations are attractive. If  the US succeeds in avoiding a recession, IT will bounce back smartly," Vijayakumar said. 

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