Benchmark indices Nifty and Sensex traded firmly in the positive in the afternoon on November 29 after auto, pharma, energy, and infra stocks bolstered the sentiment in trade today. The sharp bounce back comes a day after the markets recorded their steepest decline in nearly two months.

A large FII selloff and a slower pace of rate cuts due to high inflation worried investors in the previous session. The Federal Reserve's preferred inflation measure, the Core PCE Price Index, rose 2.8 percent year-on-year in October, tempering expectations for near-term policy easing.

At noon, the Sensex was up 721.31 points or 0.91 percent at 79,765.05, and the Nifty was up 208.50 points or 0.87 percent at 24,122.70. About 1795 shares advanced, 1522 shares declined, and 104 shares unchanged.

"A perplexing market action in recent days is the inexplicable volatility in FII activity. A few days of buying followed by yesterday’s massive selling of Rs 11,756 crores is difficult to explain. What are the factors contributing to this irrational activity," says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "Investors should wait and watch. Lots of stock-specific actions are likely starting today in response to the inclusion of 45 new stocks to the F&O list," he added.

Reliance Industries was buzzing in trade, rising almost 2 percent, after Reliance Finance and Investments USA LLC, a step-down wholly owned subsidiary of the company, entered into a stock purchase agreement with Wavetech Helium, Inc., subscribing to a 21 percent stake in Wavetech, a helium gas exploration and production company. Following the development, Morgan Stanley issued an 'overweight' call on the stock.

Telecom Major Bharti Airtel soared 4 percent to top the Nifty after receiving a 'buy' call from ICICI Securities. The price target indicates an 18 percent potential upside from the previous close on the NSE. ICICI Securities expects Bharti Airtel to offer a 14.8 percent EBITDA (earnings before interest, tax, depreciation, and amortization) CAGR for the next two years.

Pharma major Divi's Labs rose nearly 4 percent after Citi reiterated its bullishness by naming it as its top pick in the Indian pharma sector, driven by the drugmaker's expanding pipeline for its contrast media business. Accordingly, the brokerage held on to its 'buy' call on the stock, with a price target of Rs 6,850, which implies a potential upside of 15 percent from Thursday's closing.

Food aggregator Zomato traded 2 percent lower after closing its Qualified Institutional Placement (QIP) issue, raising Rs 8,500 crore through the allocation of 33.64 crore equity shares for Rs 252.62 per share, which is at a 5 percent discount to the floor price of Rs 265.91 per share.

During the afternoon, Nifty Energy, Infra, IT, and Auto rose 1- 2.4 percent in the afternoon trade. Sun Pharma, Dr Reddy's, and Divis Labds rallied the index. Other gainers included Metal, IT, and FMCG, rising to 0.6 percent.

The PSU Bank index tumbled over 1 percent in trade after SBI, Bank of Baroda, and Canara Bank dragged the index lower. The Nifty Bank index edged lower by 0.2 percent, led by a drop in HDFC Bank and SBI. Nifty Realty stocks also slipped, falling prey to profit booking after rallying 7 percent in the past week.

The broader market, represented by the mid- and small-cap indices, outperformed the benchmark indices with a modest gain of 0.1 percent each. These indices have surged 21 percent since the beginning of the year, significantly outpacing the NSE Nifty, which has risen just over 11 percent in the same period. Traders believe that following a healthy correction, the mid- and small-cap sectors could attract renewed buying interest and potentially outperform in the coming weeks.

Investors are staying cautious of key data releases tomorrow, including India’s Q2 GDP, China’s manufacturing PMI, and Eurozone CPI. Optimism could return if geopolitical tensions ease and traders expect broader market consolidation to persist within a range.

"Immediate support is placed at 23,800 and 23,680, which align with strong Fibonacci levels. These zones could act as potential reversal points, offering a buying opportunity if confirmed by price action. On the upside, 24,350 serves as immediate resistance. A sustained move above this level could propel the index toward 24,800 and 25,000, unlocking significant upside potential," Mandar Bhojane of Choice Broking said. "The Bank Nifty formed a strong bearish candle on the daily chart, indicating selling pressure. If the index sustains below the critical level of 52,000, it could test 51,200 and 51,000 as immediate support levels," he added.

Bharti Airtel, Cipla, Sun Pharma, M&M, and L&T were the top gainers on the Nifty. Laggards included SBI Life Insurance, Power Grid, Shriram Finance, Adani Enterprises, and HDFC Life Insurance.