The Indian stock market indices staged a strong recovery on Friday, November 6, with the SENSEX surging over 500 points to 79,760.10 and the NIFTY50 gaining 81 points to 24,650 after both benchmarks began the session on a volatile note. According to The Economic Times, the recovery came despite a global AI-led tech selloff that wiped out $3 trillion from S&P 500 companies, with the Nasdaq plunging 5.5% in its worst day in 19 months. Japan's Nikkei slumped nearly 7% and South Korea's Kospi fell more than 9% to slip below the 5,000 mark, while Taiwan's benchmark dropped more than 8% before regional markets stabilized. Dr. V K Vijayakumar, chief investment strategist at Geojit Investments, noted that "India is likely to be the least impacted" by the global tech rout, as the big rout of 5.6% in Nasdaq was triggered on concerns of a big slowdown in data centre spending since Democrats are opposed to massive data centre investment.
IT stocks emerged as the primary gainers during the session, with TCS, Infosys, HCL Tech, and Titan leading the charge among technology companies. As reported by The Economic Times, Titan climbed 2.56% while TCS, Infosys, and HCL Tech also advanced with gains of over 1.5%. Mahindra & Mahindra led the Nifty 50 gainers, rising 5% to top the session's performers, followed by Titan which climbed 2.43%. Bharti Airtel was also among the notable gainers with gains around 2% each. The technology sector's resilience stood out against the backdrop of the global sell-off in AI and tech stocks, with NIFTY IT rising 1.5% during the session. Nvidia, the face of the AI boom, fell 9.3% and was the biggest drag on the S&P 500, with the stock now down 2.6% for the year after annual gains of about 39%, 171%, and 239% over the previous three years. Samsung Electronics and SK Hynix fell nearly 10% and 12% respectively in South Korea, while Japan's Kioxia plunged 14% and Taiwan Semiconductor Manufacturing Co. dropped as much as 8.5%.
The market recovery received significant support from foreign institutional investors who purchased equities worth ₹35,781 crore in the last five trading days, with their net buying over the previous five sessions standing at ₹35,781 crore. According to The Economic Times, foreign institutional investors bought nearly ₹15,000 crore of Indian equities on Thursday, their biggest single-day purchase in more than a year. FIIs have overall remained buyers of Indian shares everyday this week so far, with their recent purchases intensifying this month after remaining net buyers of Indian equities in six out of 10 sessions in the second half of the previous month. Indian equity markets have gained steam this week, supported by a strong pick-up in foreign portfolio interests – net inflows worth $4 billion in the past ten sessions as a stable rupee resulted in index gains in dollar terms. Radhika Rao, senior economist at DBS, noted that "Indian equity markets have gained steam this week, supported by a strong pick-up in foreign portfolio interests – net inflows worth $4 billion in the past ten sessions." The rotation is also reinforcing India's large-cap bias, with the Sensex rising 2.6% on Thursday while the Smallcap 100 index gained only 0.67%, highlighting where institutional money is currently flowing.
While benchmark indices extended gains, broader markets crashed significantly with the Nifty Smallcap 250 index plunging nearly 1.5% and Nifty Midcap 100 index dropping more than 1% on Friday morning. As reported by The Economic Times, NSE saw 2,236 declines against 937 advances, with overall market breadth turning negative as more stocks traded in the red than in the green. Among the sectors, Nifty Metal plunged around 2% to lead losses, while Nifty IT gained 1.5% to lead gains. India VIX, which measures volatility in the market, soared nearly 8% to near 17, indicating heightened uncertainty in the broader market. The global selloff has been most severe in companies directly tied to the AI supply chain, with smaller companies facing pressure as tighter financial conditions and higher interest rates limit their ability to raise capital.
Mahindra & Mahindra led the Nifty 50 gainers, rising 5% to top the session's performers, followed by Titan which climbed 2.43%. As reported by The Economic Times, TCS, HDFC Bank, Adani Ports, and ICICI Bank were among the other notable gainers. On the losing side, Asian Paints, Bajaj Finance, and Power Grid dropped more than 2% each to lead losses on the benchmark index. Of the 30 Sensex constituents, 18 were trading higher and 12 lower, with overall market breadth remaining weak as more stocks traded in the red than in the green. The rotation is also reinforcing India's large-cap bias, with for financials, tech and auto stocks there is more upside as the rally is driven by large-caps which had become attractively valued. VK Vijayakumar from Geojit noted that "It is important to recognise the fact that this ongoing rally has fundamental support from impressive earnings growth which has come better-than-expected."
