BULLISH REBOUND! Sensex & Nifty Snap Losing Streak as Tech Stocks Ignite Rally – See What Drove the Gains!

Market Stages Strong Rebound

Indian benchmark stock indices, the BSE Sensex and NSE Nifty, ended Thursday's trading session in positive territory, successfully snapping a four-day losing streak. The recovery was primarily driven by robust buying interest in technology and information technology (IT) stocks, signaling renewed investor confidence in the sector.

Sensex and Nifty Performance

The 30-share BSE Sensex edged higher by 158.51 points, or 0.19 per cent, to settle at 85,265.32. Throughout the trading day, the index touched an intra-day high of 85,487.21, showing a gain of 380.4 points. Similarly, the 50-share NSE Nifty climbed 47.75 points, or 0.18 per cent, to conclude the session at 26,033.75. This rebound comes after both indices experienced significant drops of around 0.72 per cent (Sensex) and 0.8 per cent (Nifty) over the preceding four sessions until Wednesday.

Key Gainers and Losers

A host of prominent IT and technology companies spearheaded the market rally. Major gainers on the Sensex included Tata Consultancy Services, Tech Mahindra, Infosys, and HCL Technologies. Other contributing stocks were Bharti Airtel, Sun Pharma, Bharat Electronics, and Trent. Conversely, the market saw some pressure from laggards such as Maruti Suzuki India, Kotak Mahindra Bank, and Titan Company.

Investor Activity Insights

Foreign Institutional Investors (FIIs) continued their selling spree on Wednesday, offloading equities worth Rs 3,206.92 crore. However, this outflow was substantially absorbed by Domestic Institutional Investors (DIIs), who actively bought stocks worth Rs 4,730.41 crore, according to exchange data. This strong DII participation played a crucial role in supporting the market and facilitating the recovery.

Market Drivers and Commentary

Vinod Nair, Head of Research at Geojit Investments Limited, commented on the market's performance, noting that domestic markets closed flat amidst mixed global cues and investor caution ahead of the Reserve Bank of India (RBI) policy announcement. He added that early value-driven gains were initially restrained by a record-low rupee and persistent FII outflows. However, lowered expectations of an immediate RBI rate cut provided some support, aiding a mild currency rebound and helping indices stabilise towards the close.

Global Market Cues

Global markets presented a mixed picture. In Asia, South Korea's Kospi and Shanghai's SSE Composite Index settled lower, while Japan's Nikkei 225 and Hong Kong's Hang Seng index ended in positive territory. European equity markets were trading higher, and US markets had closed higher on Wednesday.

Commodity Watch

Brent crude, the global oil benchmark, saw a slight increase, climbing 0.38 per cent to USD 62.91 per barrel, indicating a stable yet watchful stance in energy markets.

Impact

• The rebound is expected to improve investor sentiment, particularly for the technology and IT sectors, which are showing strong performance.
• It provides a temporary relief to traders who faced losses in the previous sessions.
• However, persistent FII outflows and currency concerns remain factors to watch.
• The upcoming RBI policy decision will be critical in shaping future market direction and investor strategy.
• Impact rating: 7/10

Difficult Terms Explained

• Benchmark Indices: These are stock market indexes, like the Sensex and Nifty, that represent the overall performance of a broad segment of the stock market. They are used as a benchmark to gauge market trends.
• FIIs (Foreign Institutional Investors): These are entities registered outside India that are permitted to invest in Indian securities, including stocks, bonds, and other financial instruments. Their buying or selling activity can significantly influence market movements.
• DIIs (Domestic Institutional Investors): These are institutions based within India, such as mutual funds, insurance companies, and pension funds, that invest in the Indian stock market.
• Brent Crude: This is a major global oil benchmark used to price two-thirds of the world's internationally traded crude oil supplies. Its price movements can affect inflation, transportation costs, and overall economic sentiment.
• RBI Policy: This refers to the monetary policy decisions announced by the Reserve Bank of India, which include setting interest rates, managing inflation, and influencing credit availability in the economy.