Domestic equity benchmarks staged a modest recovery during early trading on Tuesday, led by buying interest in auto and realty shares. The Sensex climbed around 200 points to hover near the 73,700 mark, while the Nifty advanced over 70 points to trade above 23,200.

The uptick comes a day after the market witnessed a sharp selloff, erasing most gains from the previous week. Investors appeared to be selectively accumulating stocks, though broader sentiment remained guarded.

Auto and Realty Lead the Pack

Sectoral indices showed a clear bias. The auto index gained nearly a percent, with heavyweights like Mahindra & Mahindra and Maruti Suzuki contributing to the rise. Realty stocks also saw renewed interest, possibly on expectations of steady demand.

Banking and IT shares, however, showed mixed trends. While some frontline banking counters recovered minor losses, others remained under pressure. According to dealers, the buying was largely driven by domestic institutional investors (DIIs), who have been net buyers in recent sessions.

Mixed Signals from Global Peers

Overseas, Asian markets offered a mixed picture. South Korea’s Kospi jumped over 3.7 per cent, while Japan’s Nikkei added nearly a per cent. On the other hand, Hong Kong’s Hang Seng slipped 0.6 per cent, weighed down by concerns over China’s economic recovery.

Overnight cues from Wall Street were also uneven. The Dow Jones Industrial Average dipped 0.16 per cent, but the Nasdaq and S&P 500 ended higher, supported by technology stocks. That divergence kept Indian investors cautious about chasing sharp upsides.

FII Selling Continues Unabated

Foreign institutional investors (FIIs) remained net sellers for yet another session. Provisional data showed they offloaded equities worth roughly Rs 5,556 crore on Monday. In contrast, DIIs stepped in with purchases of about Rs 5,165 crore.

Over the past 30 days, FIIs have pulled out more than Rs 81,500 crore from Indian markets, while DIIs have pumped in over Rs 1 lakh crore. This ongoing tug-of-war between foreign and domestic money has kept the indices range-bound despite intermittent rallies.

Recap: Monday’s Sharp Fall

Just a day earlier, the market had ended in the red. The Sensex tumbled 719 points to close at 73,524 on June 8, while the Nifty dropped 244 points to settle at 23,123. Traders attributed that decline to profit-booking in financials and lingering concerns over global interest rates.

The recovery on Tuesday morning, therefore, is being viewed as a technical pullback rather than a change in trend. “We are seeing selective buying, but volumes are not very high,” a Mumbai-based dealer said, requesting anonymity.

What to Watch

Market participants will now track the movement of the rupee against the dollar and any fresh commentary from US Federal Reserve officials. Additionally, monthly auto sales data and progress of the monsoon remain near-term triggers for broader sentiment.

For now, the indices are holding small gains. But with FIIs still on the selling side, traders are advised to remain nimble, as volatility is unlikely to ease completely.