Trading activity showed notable improvement, with turnover climbing to Rs. 4.57 billion from Rs. 2.66 billion recorded on October 26. The roughly 72 percent increase in volumes suggests growing investor participation, with broad-based buying interest across most sectors underpinning the day's gains.
Development Banks emerged as the strongest performers, leading the sectoral advance. Hydropower, Life Insurance, and Banking sectors also contributed meaningfully to the rally, with market breadth favoring bulls as the majority of traded scrips closed in positive territory. The widespread sectoral strength indicates genuine underlying momentum rather than narrow speculative activity.
Tuesday's advance assumes added significance from a technical standpoint. The index broke decisively above the 2,570 level that had served as resistance throughout October, closing at 2,571.34. While the index did not reach the 2,600 level, the breakout above 2,570 on improved volumes lends credibility to the move. Market analysts note that this former resistance area should now act as support on any near-term pullbacks.
The rally marks a notable turnaround from the market's recent consolidation phase, during which investor sentiment had turned cautious amid weak trading volumes and mixed sectoral performance. Tuesday's post-holiday surge provided the catalyst many market participants had been waiting for to push the index out of its narrow trading range.
However, seasoned observers caution that while the breakout is encouraging, confirmation over the next few trading sessions will be critical. For the uptrend to prove sustainable, the market will need to maintain elevated volumes above Rs. 4 billion daily and see continued strength from heavyweight sectors like Banking and Hydropower. A failure to hold above the 2,570 level on any retracement could signal that Tuesday's rally was merely a short-lived bounce.
For now, market sentiment has turned cautiously optimistic, with momentum traders watching to see if the index can build on these gains. Long-term investors are being advised to monitor whether the market can consolidate around current levels or test the 2,570 support zone, which would provide potential accumulation opportunities. (Sakshyam Banjade)
