Sensex surges 1,000 points, snaps 7-session losing streak. Is the worst over?

Benchmark indices rebounded sharply on Tuesday, ending a seven-session slump, as the S&P BSE Sensex soared 1,000 points.
At 11:36 am, the Sensex was up 1044.89 points at 78,383.90, while the NSE Nifty50 advanced 304.50 points to 23,758.30. Broad market indices also saw robust gains as volatility eased, aided by reports suggesting a slowdown in foreign investor selling.
Despite the rally, analysts caution that the upward trend might be temporary.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “An important takeaway from the recent market trend is that a quick and sharp recovery is not in sight. The momentum that drove the market to its record peak of 26,216 in September is gone.”
Vijayakumar added that foreign investors’ selling activity and concerns about weak earnings growth in FY25 continue to weigh on the market.
“There can be recoveries which are unlikely to sustain given the selling mode of the FIIs and the concerns surrounding the weak earnings growth feared in FY25. At best, the market may consolidate around the present levels with sideways movements. Sustained up moves will emerge only when incoming data indicates earnings recovery,” he explained.
He also pointed out persistent weakness in small-cap and mid-cap stocks despite today’s surge.
“Though both smallcap and midcap stocks have surged sharply today, they had run ahead of fundamentals and were being driven by momentum. Investors need not rush in to grab these stocks which have more downside potential. In contrast, quality largecaps are resilient, and investors can stick to them,” he advised