Indian stock markets gained on Thursday, with the Sensex rising 75 points and the Nifty crossing 24,275. The rally was driven by strong buying in IT stocks and positive foreign investor inflows, despite a weak session for US markets overnight.
Indian benchmark indices opened in positive territory on Thursday morning, showing resilience despite a sharp decline in US markets during the previous session. The 30-share BSE Sensex climbed 75.71 points to reach 77,726.62, while the NSE Nifty 50 added 26.90 points to trade at 24,275.85. The upward movement was largely supported by the technology sector, which saw buying interest in major companies including Infosys, Tata Consultancy Services, HCL Tech, and Tech Mahindra.
Foreign Investment and Market Support
A key factor providing stability to the Indian markets is the continued interest from Foreign Institutional Investors (FIIs). According to official exchange data, FIIs purchased equities worth Rs 2,981.87 crore on Wednesday. This steady flow of capital has been a crucial support pillar for Indian equities recently, helping to balance out the impact of global volatility.
Impact of Global Factors and Oil Prices
The market sentiment remains sensitive to global cues, which are currently mixed. Brent crude oil prices eased by 1.26 per cent to trade at $89.60 per barrel. For the Indian economy, lower oil prices are generally seen as a positive development as they can help reduce the import bill and ease pressure on inflation. However, the broader regional performance was varied, with indices in South Korea, Shanghai, and Hong Kong trading in the red, while Japan's Nikkei 225 managed to post gains.
US Market Weakness and Interest Rate Outlook
Investors are also digesting the recent decline in US markets, where the Dow Jones, S&P 500, and Nasdaq all faced significant selling pressure on Wednesday. The weakness in US technology stocks was triggered by concerns over the US Federal Reserve's stance on interest rates. Although the Federal Reserve decided to keep rates unchanged, the emergence of dissenting views from policymakers who favored an increase has pushed long-dated US Treasury yields toward two-decade highs. These higher yields typically attract capital away from emerging markets, though the domestic rally suggests that local investors remain focused on strong corporate performance and liquidity in India.
What Investors Should Monitor
Moving forward, the primary focus for market participants will be whether the recovery in IT stocks can be sustained if global demand for technology services remains cautious. Investors will also track FII flow trends, as sustained buying or sudden outflows will likely dictate the short-term direction of the indices. Additionally, any further commentary from central banks regarding interest rate paths will remain a key factor influencing sentiment across global and domestic markets.