Benchmark indices Sensex and Nifty have staged a remarkable 3% surge over just four trading sessions, with the Sensex jumping over 1,500 points to touch an intraday high of 74,316 while the NSE Nifty 50 rallied more than 400 points, crossing the 23,000 mark. The recovery came after brief losses in the previous session, with buying interest returning to Dalal Street as investors bought shares across key sectors. According to reports from The Economic Times, the rally came even as global markets remained under pressure following stronger-than-expected US inflation data, demonstrating the resilience of Indian equities amid international headwinds. The Nifty 50 and BSE Sensex logged their biggest single-day gains in four months on Thursday, with the Sensex closing at 74,315.61, near the day's high, as reported by Reuters.
The IT sector continued its upward momentum for a third consecutive trading session, with significant contributions from industry leaders. As reported by The Economic Times, Tata Consultancy Services, Infosys, HCL Technologies and Tech Mahindra were among the stocks in focus, with gains coming amid improving earnings and a selloff in stocks linked to artificial intelligence. The correction in AI-related stocks could potentially redirect some investor attention towards Indian equities, providing additional support to the sector's rally. VK Vijayakumar, chief investment strategist at Geojit Investments, attributed this strength to strong results from major IT companies and positive management commentary, which helped the Nifty remain resilient and provided fundamental support to the broader market. The rebound in global AI-related stocks and optimism driven by corporate earnings also contributed to the sector's continued strength.
Falling crude oil prices provided a major boost to Indian equities, with Brent crude futures declining $1.76, or 1.75 per cent, to $104 per barrel while US West Texas Intermediate crude fell $1.02, or 1.07 per cent, to $94.07 per barrel on Thursday. Oil prices eased as investors weighed potential supply disruptions following attacks on shipping in the Strait of Hormuz against US efforts to reduce petroleum transportation costs by relaxing sanctions on certain vessels. Lower crude oil prices are generally positive for India, one of the world's largest oil importers, as a sustained decline can reduce the country's import bill, ease inflationary pressures and lower costs for sectors that depend heavily on fuel. Cheaper oil can also ease pressure on the rupee and improve the outlook for corporate earnings.
The Securities and Exchange Board of India (Sebi) announced a regulatory reversal that significantly boosted market sentiment. As reported by Reuters, Sebi said it would use volume-weighted average prices from the final 30 minutes of regular trading to settle expiring stock and index derivatives contracts, reversing its earlier decision to use the closing auction session (CAS) following pushback from traders. The move is expected to reduce expiry-day volatility under CAS, benefiting brokers whose orders remain below pre-CAS levels. Meanwhile, longer-dated US Treasury yields fell to their lowest levels since September amid concerns over slowing AI growth and expectations that the Federal Reserve would keep interest rates unchanged at its next meeting, providing additional support to global markets.
According to The Economic Times, experts noted that FII selling could likely persist as long as yields remain above 5% and oil above $100 per barrel. The current rally follows a notable rise earlier in the week, with the market showing resilience despite mixed sectoral performance. A change in foreign investor flows could provide additional support to Indian equities, although any reversal remains uncertain. The sustainability of the currency's recovery will depend on global dollar movements, capital flows and India's external economic conditions. The IT sector's third consecutive session of gains continues to be a key driver of the broader market recovery, with the sector benefiting from both fundamental strength and favorable market conditions. The heavy buying in banking, IT and Reliance Industries shares amid easing crude oil prices also contributed significantly to Thursday's strong performance.
