Indian benchmark indices rebounded on Thursday, with the Sensex gaining 354 points and the Nifty settling at 22,726. The recovery was driven by buying in IT stocks and lower crude oil prices, providing a buffer against the sharp selling seen across other Asian markets.
Indian equity markets showed resilience on Thursday, ending the session with gains despite a difficult climate for global stocks. The BSE Sensex rose 354 points to reach 73,157, while the NSE Nifty added 96 points to close at 22,726. This performance comes as a surprise to many, as other major Asian markets faced significant pressure.
Indices in Japan and South Korea experienced steep declines, with the Nikkei 225 and the Kospi dropping sharply. This weakness was triggered by a poor session on Wall Street, where the technology-heavy Nasdaq fell nearly 2%. Investors globally are worried about persistent US inflation and the possibility that the Federal Reserve may keep interest rates high for longer, which often hurts technology companies.
However, domestic sentiment found support from two key areas. First, crude oil prices provided relief, with Brent crude falling 1.6% to $104.4 per barrel. Lower oil prices are generally beneficial for the Indian economy, as they help reduce the country's import bill and can keep local inflationary pressures in check. Second, there was a clear rotation of money into domestic IT stocks. Investors appear to be seeking stability in Indian IT companies, viewing them as a safer bet compared to the volatility seen in US-based tech stocks.
Despite the positive day, risks remain for the market. Foreign Institutional Investors (FIIs) have shown a cautious approach, with data from Wednesday showing an outflow of Rs 1,857 crore from the Indian market. This indicates that global funds are still taking money off the table during periods of uncertainty.
For investors, the key monitorable will be how long this decoupling from global markets can last. While domestic IT performance offers some protection, the direction of the market will likely depend on whether global inflation fears settle down and if foreign investors return to buying Indian equities. Companies like HCLTech will be watched closely, as their recent performance reports provide insight into whether the operational resilience in the Indian IT sector can withstand global headwinds.