Indian stock indices recovered on Thursday, with the Sensex and Nifty crossing 77,000 and 24,000 marks. The rebound follows a sharp drop on Wednesday, as investors brushed off geopolitical concerns while foreign institutional buying provided support.
Indian equity markets staged a sharp recovery on Thursday, erasing a portion of the losses from the previous day. Both the S&P BSE Sensex and the Nifty 50 indices regained key psychological levels, closing back above 77,000 and 24,000 respectively. This comeback comes after a difficult Wednesday session where markets fell over 2% due to rising geopolitical tensions in the Middle East.
Investors appear to be looking past the immediate noise regarding US-Iran relations. While crude oil prices are hovering around $79 per barrel, the market seems to have priced in this level. Financial analysts suggest that the primary risk for India—a significant spike in oil prices beyond $100—remains unlikely as long as major shipping routes like the Strait of Hormuz remain open. For the Indian economy, steady oil prices mean that the import bill remains predictable, which helps maintain currency stability.
Institutional Support and Sector Performance
Supporting the recovery is the continued activity of foreign institutional investors. Data indicates that these investors have net-bought approximately ₹3,954 crore in the Indian cash market over the last four trading days. This consistent capital inflow is helping large-cap stocks, particularly in the banking and automobile spaces, stay resilient.
Sector-wise, the recovery was widespread. The Nifty Consumer Durables index recorded a gain of 1.91%, while realty and private banking stocks also saw increased interest. The India VIX, which tracks market fear, dropped by more than 7%. A falling VIX typically signals that investors are feeling more confident and that the sudden panic seen earlier in the week has started to subside.
IT Sector Divergence
While the broader market gained, the Nifty IT index bucked the trend, declining by 1.46%. This weakness appears to be linked to investors booking profits before the upcoming earnings announcements from major technology firms like Tata Consultancy Services. In the IT space, names such as Infosys also saw selling pressure, highlighting a cautious approach by traders who are waiting for concrete financial results rather than betting on sector-wide growth.
For investors, the key monitorable remains the stability of global oil prices and the consistency of foreign fund flows. If crude oil remains near current levels, the market may continue to focus on domestic economic data and upcoming corporate earnings. However, if geopolitical tensions intensify and affect global supply chains, market volatility could return quickly, especially in sectors that are highly sensitive to energy costs.