IT rebound fuels market rally; Infosys leads Nifty gainers with nearly 6% jump
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Benchmark equity indices staged a strong rebound on Thursday, led by a sharp recovery in information technology (IT) stocks, as investors lapped up beaten-down sectoral heavyweights amid easing crude oil prices and improving risk appetite.
The BSE Sensex surged 579.48 points, or 0.75%, to settle at 77,502.12, while the NSE Nifty 50 gained 169.85 points, or 0.71%, to close at 24,175.70. Meanwhile, the rupee weakened 24 paise to end provisionally at 95.40 against the US dollar.
With Thursday's advance, benchmark indices have now logged gains for two consecutive sessions. While Wednesday's rally was driven by financials, auto and FMCG stocks, Thursday's surge was powered almost entirely by a sharp rebound in IT shares, indicating a broader rotation back into sectors that had borne the brunt of the recent correction.
IT stocks spearhead recovery
The rally was driven almost entirely by IT stocks, which rebounded sharply after four consecutive sessions of losses that had dragged the Nifty IT index to a 52-week low.
Infosys emerged as the top gainer on the Nifty, jumping 5.82%, followed by Tech Mahindra (4.57%), HCLTech (4.56%) and TCS (4.45%). Wipro also advanced 2.27%, stressing broad-based buying across the sector.
The Nifty IT index soared 4.64%, making it the day's best-performing sector by a wide margin. Other technology-focused indices, including Nifty India Digital and MidSmall IT & Telecom, also posted gains of over 2%.
Market participants attributed the rally primarily to bargain buying and short covering after the recent selloff, rather than any fresh company-specific developments or earnings upgrades.
Falling crude boosts sentiment
Apart from the IT rebound, investor sentiment was aided by declining global crude oil prices, with Brent crude slipping below the $70-a-barrel mark following progress in indirect US-Iran talks. Lower oil prices are generally viewed as positive for India, as they help ease imported inflation and reduce the country's import bill.
The recovery in IT stocks came despite a series of cautious brokerage reports in recent days. Several global brokerages have trimmed target prices and flagged subdued demand ahead of the first-quarter earnings season, suggesting Thursday's rally was driven more by technical factors than a meaningful improvement in the sector's earnings outlook.
Broader market remains firm
Buying interest extended beyond frontline indices, with broader markets also ending higher. However, financial stocks delivered a mixed performance. While Bajaj Finserv gained 3.42%, private lenders Axis Bank and Kotak Mahindra Bank closed in the red.
On the flip side, losses remained limited across the market, with Max Healthcare Institute , down 1.05%, emerging as the biggest Nifty loser, highlighting the broad-based nature of Thursday's rally.