Indian equities staged a strong comeback with benchmark indices settling over 1% higher led by strong buying in pharma and metal stocks. The BSE Sensex closed 400+ points, or 1.06%, higher at 75,398.72 after touching an intraday high of 75,681.88, while the NSE Nifty 50 climbed 277 points, or 1.18%, to settle at 23,689.60. According to reports from Economy News, the rally marked a strong rebound after benchmark indices had corrected nearly 4% over the previous four sessions amid concerns over rising crude oil prices and uncertainty following Prime Minister Narendra Modi's austerity call. A rebound in financial shares also supported the rally, bringing much-needed optimism back to Dalal Street.
The Nifty Pharma index emerged as the top performer, surging 2.80%, while the Nifty Healthcare index climbed 2.63% as investors rotated towards defensive sectors, as reported by Economy News. The Nifty Metal index gained 2.11% amid firm global commodity prices and hopes of improving demand from China. Banking and financial stocks led the market recovery, with the Nifty Bank index advancing 1.57% and Nifty Financial Services gaining 1.42%. Among frontline gainers, Bharti Airtel jumped more than 5% after reporting strong quarterly earnings supported by tariff hikes, premium subscriber additions and healthy growth in its Africa business. Other top gainers included Eternal, Adani Ports, Sun Pharma, NTPC and M&M. On the flip side, Nifty IT was the sole laggard, falling nearly 2%, dragged lower by Infosys (down 2.46%), Tech Mahindra (down 2.25%), HCLTech and TCS amid persistent concerns over global technology demand. According to ETBFSI, Nifty Media gained 1.02% and Nifty Auto rose 0.71% during the session.
India's valuation premium over regional peers is narrowing as AI-driven rallies in Taiwan and South Korea attract foreign investors, while muted earnings growth and sustained FII outflows continue to weigh on domestic equities, according to CNBC TV18. India — once regarded as the most expensive equity market in the region — is quietly losing its valuation premium over other emerging markets due to the absence of a strong artificial intelligence investment theme. The Indian rupee slipped to another record low of 95.9 against the US dollar during the session, according to Live Mint reports, with the currency having declined nearly 7% this year and is among the worst-performing Asian currencies. However, reports suggesting that the government may consider tax relief for foreign investors in bond markets boosted sentiment, as investors viewed the move as supportive for capital inflows and the rupee.
Investor sentiment improved further as market volatility cooled, with India VIX declining over 4% to 18.61, indicating easing nervousness among traders, as reported by Economy News. The rally was supported by optimism surrounding ongoing talks between US President Donald Trump and Chinese President Xi Jinping, which raised hopes of expanding economic cooperation. Vinod Nair, Head of Research at Geojit Investments Limited, noted that investor confidence was bolstered in anticipation of potential government measures to mitigate INR weakness. According to ETBFSI, crude oil prices continued to remain elevated amid ongoing geopolitical concerns, with Brent crude trading at USD 105 per barrel. In the commodity market, gold prices for 24 karat reached ₹1,62,250 per 10 grams while silver prices declined by 1% to ₹2,97,002 per kilogram. Rupak De, senior technical analyst at LKP Securities, observed that while the index rallied sharply higher, it faced resistance near the previous congestion zone around 23,800, leading to a slightly lower closing. The index continues to trade below the critical 20 EMA, indicating that the broader trend remains bearish, with a decisive move above 23,800 potentially triggering fresh upside momentum towards 24,200 and higher levels.
