Indian equity benchmarks Sensex and Nifty rallied over 1% on Thursday, recovering from Wednesday's geopolitical-led sell-off. The bounce was supported by consistent foreign institutional investor inflows and value buying in large-cap stocks. Investors should monitor Brent crude prices, which remain a key indicator for market stability amid global uncertainty.
Indian stock markets staged a strong recovery on Thursday, with the BSE Sensex and Nifty 50 both climbing 1.07%. The Sensex touched an intraday high of 77,326.65, gaining 823 points, while the Nifty 50 reclaimed the 24,100 level. This rebound helped recover a portion of the sharp losses recorded in the previous session, which were driven by concerns over geopolitical instability.
The recovery was supported by positive data regarding foreign institutional investor activity. Exchange data indicated that foreign investors injected Rs 1,962.80 crore into the cash market on Wednesday, marking the fourth consecutive session of net buying. Over this four-day period, foreign inflows have totaled approximately Rs 3,954 crore, providing a cushion against broader market volatility.
Sectoral Gains and Market Breadth
Market sentiment was broad-based, with gains seen across several sectors. The Nifty Realty index outperformed with a 2.3% rise, while FMCG, PSU Bank, and Consumer Durables indices also posted gains above 1%. The rally extended to the broader market, as the Nifty Midcap 100 and Nifty Smallcap 100 indices rose by 1.25% and 1.52%, respectively. Market breadth was significantly positive, with 2,492 stocks advancing against 599 declining, indicating widespread participation in the recovery.
Crude Oil Prices and Market Volatility
Investors have been closely tracking crude oil prices due to their impact on India’s import bill and inflation. Brent crude was trading near $78.80 per barrel on Thursday. While concerns regarding the potential closure of the Strait of Hormuz briefly heightened anxiety earlier this week, current futures markets suggest that investors are pricing in a lower probability of a major disruption. Additionally, the India VIX, which tracks expected market volatility, dropped by 10% to 13.27, reflecting a decrease in immediate market stress.
Large-Cap Recovery and Weekly Expiry
Large-cap companies were central to Thursday’s rally. Bharti Airtel led the Sensex gains with a 3.3% increase, followed by Sun Pharma, Bajaj Finserv, and IndiGo, each rising over 2%. Market heavyweights HDFC Bank and Reliance Industries also contributed with gains of nearly 1% each. The session also coincided with the weekly expiry for Sensex derivatives, a period that frequently sees increased trading volume and volatility as participants square off their positions.
Looking ahead, the sustainability of this recovery will depend on the stability of global energy prices and the consistency of foreign fund flows. Investors may track whether the current buying momentum in large-cap financial and automobile stocks continues as the market navigates global macroeconomic factors.