Indian equity benchmarks ended Thursday's session with significant gains, breaking their seven-session losing streak as Sensex surged 628.04 points to 77,537.72, while Nifty 50 rose 153.55 points to 24,231.85. According to The Economic Times, the rally was supported by a weakening dollar index and declining US bond yields, with the dollar retreating to its lowest in three months and yields on US long bonds cooling from levels last seen during the subprime crisis two decades ago. Midcap and smallcap stocks also advanced, with the Nifty Midcap 150 gaining 0.3% and the Nifty Smallcap 250 climbing 0.6%. Fresh foreign fund inflows also added to the markets' optimism, with Domestic Institutions buying equities worth ₹3,537 crore on Thursday, while Foreign Portfolio Investors sold shares worth ₹583 crore. HDFC Bank, ICICI Bank, Bharti Airtel, Reliance Industries, Eternal, Axis Bank and Larsen & Toubro were top movers in the SENSEX, collectively contributing over 320 points towards the gain. Eternal emerged as the top gainer among Nifty stocks, rising 2.48%, followed by Shriram Finance 2.1%, Kotak Bank at 1.82% and ITC at 1.72%, as noted by market experts.
Banking and IT stocks led the market recovery, with IT emerging as the standout performer and providing strong support to the broader market. According to The Economic Times, among Nifty 50 gainers, Eternal, Infosys, Tech Mahindra, Bajaj Finance, Tata Consultancy Services and HCL Tech were among the biggest winners during Thursday's session. On the losing side, Hindalco was the top decliner, down 0.59% to ₹1,032.85, while ONGC slipped 0.52% to ₹236.77 and Coal India fell 0.44% to ₹398.25. Sectorally, IT was the standout performer, while the Defence index was the worst performer, shedding 1.60%, and Energy indices also closed lower by 1.20% in the previous session. In Asian trade, South Korea's Kospi surged 6% while Japan's Nikkei was trading 1.35% higher, with MSCI's Asia Pacific index rising 1.7%, reinforcing the improved regional risk mood. The India VIX declined 6.57%, indicating a moderation in near-term volatility, as noted by market experts.
Market breadth was strongly positive with 2,281 stocks rising out of 3,491 traded, indicating broad-based buying interest across sectors. Both SENSEX and NIFTY50 surged nearly 1% to their intraday highs of 77,609.54 and 24,247.65 levels, respectively, during Thursday's session. The volatility index tumbled nearly 18% on Thursday, touching an intraday low of 9.33 levels, with the India VIX index trading at 10.68 level, losing 5.65%. Technical indicators have weakened significantly, with the daily Relative Strength Index (RSI) slipping to 41.34 and remaining below its signal line, reinforcing the cautious near-term bias. According to The Economic Times, Sunny Agrawal, head-fundamental research, SBI Securities, noted that Wednesday's measures by the US Fed to contain the long-tenure bond yield led to a fall in the dollar index, which augurs well for emerging markets and commodities. He added that this is likely to help ease the pressure on USD-INR and reduce the probability of a rate hike in India, thereby leading to a rally in rate-sensitive stocks Thursday.
The India Inc's Q1 earnings season has come in better-than-expected, cheering investors and providing additional support to the market recovery. According to Business Standard, the Nifty 50 companies reported 18% Y-o-Y growth in profit after tax (PAT) in Q1FY27, the highest growth in 10 quarters and well ahead of the 10% growth estimated by Motilal Oswal Financial Services. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that "the earnings recovery is happening, and this has the potential to impart resilience to the market despite the external headwinds like strong crude prices." After the recently concluded earnings announcement for the quarter ended June 30, 2026 (Q1 FY27), the market investors showed interest, with the Q1 earnings delivering strong numbers supported by broad-based improvement across consumption, exporters, BFSI and commodities. However, many reports said that the mid- and small-cap firms delivered better earnings than the large-cap firms, as noted by market experts.
Brent crude futures, the global benchmark, climbed 2.5% to $93.96 a barrel, with oil prices trading higher after US President Donald Trump threatened "economic warfare" against Iran and warned about financial penalties for countries supporting Tehran. According to The Economic Times, the UAE also said it was suspending trade with Iran. The primary factor weighing on investor sentiment has been the sharp surge in crude oil prices, as the geopolitical situation in West Asia continues to show little sign of easing. Vinod Nair, Head of Research, Geojit Investments Ltd, noted that markets turned cautious ahead of the release of the U.S. FOMC minutes, as investors remained concerned that the Federal Reserve's battle against inflation may continue. Persistent geopolitical tensions, elevated crude oil prices, and renewed weakness in the Indian rupee against the U.S. dollar continue to weigh on investor sentiment, as explained by Ponmudi R, CEO of Enrich Money. The rupee closed at 95.70 Thursday, compared with its previous close of 95.75, with the dollar index at a three-month low of 98.84, with the currency expected to stay in the range of 95.50 to 96 Friday.
