What Changed The Stock Market Overnight? 8 Key Drivers Behind Market Rebound

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After a sharp drop on Tuesday, markets stabilised as major indices approached oversold technical levels, leading to a modest bounce.

India’s benchmark indices open on a firmer note today, rebounding from Tuesday’s heavy sell-off, as global equities provide some tailwinds. The Sensex opens at 80,777.65, up 40.14 points or 0.05 per cent, while the Nifty 50 rises 17.95 points to start at 24,560.45. Early momentum reflects investor relief after tech-led rallies on Wall Street and stronger Asian markets, although technical charts signal limited upside ahead of the RBI monetary policy.

On Tuesday, both indices slid as investors booked profits amid foreign capital outflows. The Sensex declined by 636.24 points (0.78 per cent) to close at 80,737.51, while the Nifty 50 slipped 174.10 points (0.70 per cent) to settle at 24,542.50.

“There is no outcome yet on the global trade settlement involving major economies, which is creating a lot of uncertainty amongst the investors and prompting them to slash their equity bets at regular intervals. Also, with no solution yet to the conflict between Russia & Ukraine, the risk-off sentiment continues with the investors,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Technical View: Nifty and Sensex Range-Bound

According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, “The intraday market texture was weak, but a fresh sell-off was likely only if Sensex breached 80,500. A rebound could occur if the index crosses 81,000, potentially lifting it toward 81,500.”

The Nifty continued to trade within the broader 24,500–25,000 band. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted, “A long negative candle has negated the previous session’s optimism. The index’s current position at the lower end of the range signals potential further weakness.”

As per Mint, a breakdown below 24,400 could drag Nifty to 24,300, while resistance is seen near 24,800. Dr. Praveen Dwarakanath of Hedged.in pointed out that momentum remains intact: “The index is bouncing every time from the 24,500 level, indicating strong support.”

Sideways Bias with Clear Support Zones

VLA Ambala, Co-Founder of Stock Market Today, explained, “24,430 was a crucial make-or-break level. Until Nifty breaks out of the 24,500–25,150 range, the bias remains sideways. RSI is at 50, suggesting a potential bounce if sentiment improves.”

Traders, according to Mint, were advised to buy near 24,250–24,180 and sell at rallies near 24,670–24,810, guided by intraday support and resistance levels.

Bank Nifty: Holding Strength Above Support

Despite intraday volatility, Bank Nifty remained structurally bullish. On Tuesday, it hit a fresh high of 56,161 before closing lower by 0.5 per cent. Analysts maintained confidence in its uptrend.

Bajaj Broking Research stated, “The index is consolidating between 56,000 and 53,500. A move above 56,000 will likely accelerate gains toward 56,700.”

Dhupesh Dhameja, Derivatives Analyst at SAMCO Securities, added, “Bank Nifty remains bullish above its 10-day EMA. Unless 55,000 is decisively breached, sellers may struggle to gain traction. Expect moderate gains with intraday volatility.”

No.	Reason	Details
1	Tech Rally on Wall Street	US tech stocks like Nvidia (+2.9%), Broadcom (+3.2%), and Tesla (+0.46%) rallied, lifting Nasdaq by 0.81 per cent, improving global sentiment.
2	Positive Asian Markets	Nikkei 225 (+0.83%), Kospi (+1.57%), and Kosdaq (+1.06%) posted gains, reflecting regional optimism and supporting Indian equities.
3	Gift Nifty Premium	Gift Nifty traded at ~24,730, about 55 points above Tuesday’s Nifty close, indicating a positive start and bullish sentiment from offshore traders.
4	RBI Policy Expectations	Market participants await RBI’s monetary policy decision later this week, with hopes of a status quo or dovish outlook supporting risk assets.
5	Technical Support at Lower Levels	Nifty and Sensex bounced from strong support zones (24,500 and 80,500 respectively), encouraging buying on dips strategy among traders.
6	US Job Data Shows Mixed Signs	April’s JOLTS report shows job openings rose, but layoffs also increased, reducing rate hike fears and aiding equity sentiment globally.
7	US Factory Orders Decline Sharply	A 3.7 per cent fall in US factory orders signals slowing demand, which in turn eases inflation worries and supports a soft Fed stance.
8	Profit-Booking Exhaustion After Tuesday’s Fall	After a sharp drop on Tuesday, markets stabilised as major indices approached oversold technical levels, leading to a modest bounce.

Global Cues and RBI Policy in Focus

Investor attention remains glued to macroeconomic triggers. On Wall Street, the Nasdaq surged 0.81 per cent on tech stock strength—Nvidia gained 2.9 per cent, Broadcom hit a record high, and Tesla edged up 0.46 per cent. Asian indices like Nikkei 225 rose 0.83 per cent, Kospi gained 1.57 per cent, while Gift Nifty traded at a premium, indicating a positive undertone.

In the US, job openings rose to 7.391 million in April, per the JOLTS report, while factory orders fell 3.7 per cent, pointing to softening demand. Meanwhile, Japan’s services PMI dipped to 51.0, reflecting weaker growth.

Crude oil prices eased after recent highs. Brent slipped 0.17 per cent to $65.52 a barrel, while WTI dropped 0.20 per cent to $63.28. The US dollar remained under pressure, with the Dollar Index flat at 99.159.

With the Reserve Bank of India’s rate decision due later this week, markets may continue to see measured moves. Traders are expected to remain cautious until more clarity emerges on interest rate guidance and inflation outlook.