Mumbai: India’s equity indices soared 2.5% on Friday-the biggest single-day gain in five months-as traders rushed to cover bearish bets in an oversold market ahead of the Maharashtra state election results on Saturday. The bounce-back follows Thursday’s 0.7% slump in the wake of the US indictment against Gautam Adani and others over corruption charges. Seven out of 11 Adani Group stocks recouped some of their losses on Friday.The NSE Nifty gained 2.4%, or 557 points, to close at 23,907. The BSE Sensex advanced 2.5%, or 1,961 points, to close at 79,117. The surge was also the third-biggest advance in a trading session in 2024 so far though money managers and analysts are sceptical about whether the renewed strength is here to stay. The occasions on which both indices gained more than they did on Friday were on June 3 after the general election exit polls and on June 5, after results were announced.115584730115584738 IT and Banks Lead Gains Traders were reluctant to take a chance on retaining aggressive bearish bets over the weekend with the Maharashtra election results due on Saturday. A better-than-expected show by the ruling BJP-led coalition is expected to help sentiment following on from the party’s surprise victory in Haryana in October. “After almost seven weeks of fall, it was more of a pullback in the markets today due to short covering action,” said Rajesh Palviya, head of technical and derivatives, Axis Derivatives. “If the NDA (National Democratic Alliance) performance is poorer than expectations, then the rally may fizzle out but if there is a positive surprise, then Nifty could move towards 24,400 level.”From September 27, when the market selloff started, till Thursday, the Nifty had fallen nearly 11% in the sharpest declines so far in 2024 on account of record foreign institutional selling and corporate earnings disappointment. While the market appeared ripe for a recovery, the extent of the rally in the market came as a surprise.”The markets were oversold on a very short term and the Adani news held the markets back when it was recovering,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies. “The gains today were a bounce from the bottom rather than a fundamental one.” Holland said the market gains could be shortlived as the Reserve Bank of India (RBI) is not likely to slash interest rates and earnings remain under pressure. The RBI Monetary Policy Committee is scheduled to meet December 4-6.A likely slowdown in foreign institutional selling in December is also seen as a factor supporting a market rebound. “Foreign investors are less active in December and if the global factors remain supportive then markets could see a rally, but it is not expected to be significant,” said Holland.Foreign investors sold shares worth a net Rs 1,278 crore on Friday, while their domestic counterparts bought to the tune of Rs 1,722. crore. So far in November, overseas investors have sold shares worth Rs 25,254.63 crore, following the record offloading of Rs 1.04 lakh crore in October.Information technology and banks led gains in Friday’s trading session. The Nifty IT index surged 3.3%. Bank Nifty gained 1.51% while Nifty PSU Bank Index and Private Bank Index jumped 3% and 1.04%, respectively. “Valuations are reasonable in banking stocks while IT stocks are factoring in the corporate tax cut which could accelerate their business,” said Holland. Palviya said that IT, pharma and real estate are themes that could yield better returns for investors along with banking stocks. The Mid-cap 150 index advanced 1.15% while the Small-cap 250 index ended 0.98% higher on Thursday. Out of the 4,041 shares traded on the BSE, 2,396 advanced, while 1,539 declined. Since September 27 till Thursday, the mid-cap150 has declined 10% and the small-cap 250 has dropped 9%.Elsewhere in Asia, China tumbled 3.1% and Hong Kong declined 1.9% while Taiwan was up 1.6%. South Korea and Indonesia advanced 0.8% and 0.77%, respectively. The pan-Europe index Stoxx 600 rose 1.18% while in the US, Wall Street’s main indices were up 0.13-0.56% at the time of going to press.