Indian equity benchmarks staged a significant recovery on Thursday, with the 30-share BSE Sensex advancing 628.04 points (0.82%) to settle at 77,537.72. The broader NSE Nifty50 index also climbed 153.55 points (0.64%), closing at 24,231.85. This rally, which was broad-based across banking, financials, consumer, IT, automobile, media, and realty sectors, boosted investor wealth by approximately Rs 2.77 lakh crore, bringing the combined market capitalization of BSE-listed companies to Rs 491.48 lakh crore.
Key Drivers Behind the Market Surge
The rebound in the Indian equity market was primarily fueled by a stabilization in global bond markets. This followed the US Treasury's announcement of measures to increase buybacks of long-duration debt, easing concerns over rising global yields. Experts like Ajit Mishra of Religare Broking highlighted that a stronger rupee and short covering after a recent correction further supported the recovery. Ankur Punj of Equirus Wealth also noted that moderating US bond yields and a mildly appreciating rupee contributed to a 'risk-on' sentiment among investors, despite an underlying cautious tone.
Among the top performers on the Sensex were major financial institutions such as HDFC Bank Ltd, ICICI Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, and Bajaj Finance Ltd. Other significant gainers included Bharti Airtel Ltd, Reliance Industries Ltd (RIL), Larsen & Toubro Ltd (L&T), Infosys Ltd, and ITC Ltd.
Lingering Concerns and Future Outlook
Despite the positive momentum, several factors continue to keep investors cautious. Brent crude prices remain elevated near $94 per barrel, fueled by ongoing geopolitical tensions and uncertainty surrounding the Strait of Hormuz. These elements pose persistent inflation and external-sector risks for the economy.
From a technical perspective, Rupak De, Senior Technical Analyst at LKP Securities, observed that the Nifty50 found support at a critical level and reclaimed its 50-day Exponential Moving Average (EMA), signaling an improvement in the short-term trend. The short-term sentiment appears positive, with expectations for Nifty to move towards higher levels. Resistance is identified at 24,350 and 24,500, while support is placed at 24,150.
Broader Market Performance
The recovery wasn't limited to large-cap stocks. The broader market also showed strength, with the Nifty Smallcap 100 gaining 0.68% and the Nifty Midcap100 rising 0.41%, indicating a widespread positive sentiment across different market segments.