Sensex jumps 889 points, Nifty tops 24,250 as IT stocks lead market rally

Indian benchmark indices snapped a three-day losing streak on Wednesday, led by a sharp rally in information technology stocks, as easing concerns around artificial intelligence (AI) spending and renewed buying in heavyweight names lifted investor sentiment.

The BSE Sensex surged 888.68 points, or 1.16%, to settle at 77,654.60, while the NSE Nifty50 climbed 264.85 points, or 1.10%, to end at 24,250.20. The Indian rupee also strengthened by 17 paise to settle provisionally at 95.65 against the US dollar.

IT stocks steal the show

Information technology stocks emerged as the biggest winners of the session, with the Nifty IT index climbing 2.32%. Metal stocks also witnessed strong buying, with the Nifty Metal index advancing 2.31%, while FMCG, Pharma and Consumer Durables gained between 1.4% and 1.7%. On the other hand, Realty, CPSE and Auto indices ended marginally lower.

Infosys, Hindustan Unilever, Hindalco Industries, Tata Steel and Jio Financial Services featured among the top gainers on the Nifty, while Adani Ports, Mahindra & Mahindra, Power Grid, Eicher Motors and Bajaj Auto ended as the top laggards.

Nevil Dedhia, managing director and head of institutional equities at Equirus Securities, credited the rally in IT stocks to a shift in investor positioning rather than a broad-based recovery in global technology shares.

"The sharp rally in Indian IT stocks reflects a shift in investor preference rather than a broad-based technology rebound," Dedhia said. "Following the recent correction in AI infrastructure providers globally, investors appear to be rotating towards IT services companies, which offer attractive valuations and healthy free cash flow yields."

He added that enterprises are increasingly prioritising practical AI implementation and modernisation projects over large infrastructure spending, creating fresh opportunities for IT services firms.

"The growing adoption of open-source models and small language models, alongside frontier models, is likely to increase the need for systems integrators and IT services firms that can help enterprises integrate, optimise and scale AI across their operations," Dedhia said.

Asian markets ended mixed on Wednesday as investors weighed corporate earnings, elevated crude oil prices and developments around global trade. Hong Kong's Hang Seng index climbed nearly 2%, while Australia's ASX 200 gained around 1% and China's Shanghai Composite edged higher. However, Japan's Nikkei 225 fell about 1.5%, Taiwan's benchmark tumbled nearly 3.8% and South Korea's Kospi slumped almost 6%, indicating weakness in select technology-heavy markets. Meanwhile, oil prices remained elevated, with Brent crude rising more than 4.5% to around $87.9 a barrel and WTI crude gaining over 4% to trade above $82.6, keeping investors watchful of potential inflationary pressures and their impact on global markets.