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Sensex and Nifty, the two benchmark indices, rallied on Thursday, supported by buying in information technology (IT) stocks, even as Asian markets saw sharp losses. The rupee also strengthened against the US dollar while a decline in crude oil prices provided some support.
As of 11:45 am, the BSE Sensex was trading at 73,982.33, up 1,200.44 points or 1.65%. The NSE Nifty50 gained 341.75 points, or 1.51%, to 22,964.45.
IT stocks lead market gains
Tech Mahindra, Tata Consumer Products, and Tata Consultancy Services (TCS) were among the top gainers on the Nifty50. The Nifty IT index advanced 2.4%, taking its gains over three sessions to around 8.3%. Infosys, TCS, and HCLTech rose about 3% each.
The rally in IT stocks followed HCLTech's results and improved sentiment towards the sector. Among broader market indices, the Nifty MidCap index gained 0.27%, while the Nifty SmallCap index declined 0.66%.
Sectorwise, the Nifty IT index was the top performer while the Nifty PSU Bank index registered the steepest decline.
Brent crude, the global oil benchmark, fell 1.60% to $104.40 per barrel.
FII selling may ease as IT sentiment improves
V K Vijayakumar, chief investment strategist at Geojit Investments Ltd, said foreign institutional investors (FIIs), who have been selling Indian equities and investing in artificial intelligence (AI) stocks, could pause the trend and potentially reverse it if conditions become favourable. “FIIs who have been selling Indian stocks and buying AI stocks will halt this trend and under favourable conditions might even reverse it. The strength in the IT stocks following the results of HCLTech and the optimism surrounding that will hold the IT index strong,” Vijayakumar said.
However, foreign investors continued to remain net sellers on Wednesday, offloading equities worth ₹1,857.44 crore, according to exchange data.
Asian markets slide amid global weakness
Asian markets came under significant selling pressure on Thursday. South Korea's Kospi tumbled nearly 8%, while Japan's Nikkei 225 declined 5.07%. Shanghai's SSE Composite and Hong Kong's Hang Seng indices also traded lower.
US markets ended Wednesday's session in negative territory, adding to the cautious global backdrop.
Pabitro Mukherjee, deputy vice-president of research at Bajaj Broking, said the Nifty's recent price action indicated consolidation following the previous session's strong upward move. He noted that the index had failed to sustain gains above last week's high of 22,776 and had witnessed a sharp intraday decline before closing at 22,622 in the session he analysed.
According to Mukherjee, a sustained move above 22,776 could open the way for a recovery towards 23,000-23,100. Failure to cross that level could keep the index in a consolidation range of 22,300-22,775.
He said that the Nifty would need to form higher highs and higher lows on a sustained basis on the weekly chart and reclaim 23,100, a recent breakdown level, to signal a pause in the sharp decline seen over the preceding two months.
Rupee gains 31 paise against dollar
The rupee appreciated 31 paise to 94.86 against the US dollar in early trade on Thursday, supported by the continuing impact of the Reserve Bank of India's foreign exchange interventions and liquidity-tightening measures.
Market participants attributed the currency's gains to central bank intervention and the unwinding of long dollar positions. However, persistent external macroeconomic pressures could limit further appreciation. At the interbank foreign exchange market, the rupee opened at 94.95 before strengthening to 94.86 against the dollar. On Wednesday, the currency had gained 19 paise to close at 95.17.