Indian equity markets rebounded strongly this week, with the Sensex closing nearly 2% higher. Small-cap stocks led the rally, with Banco Products gaining nearly 35%. Analysts caution that more clarity is needed to confirm a trend reversal, with upcoming election results and economic data being key factors to watch.
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This strength is underpinned by robust domestic demand, a sustained capex cycle, and relatively limited exposure to global shocks compared to developed markets.