Benchmark equity indices staged a strong recovery on Thursday, with the Sensex gaining 628 points and the Nifty snapping its seven-session losing streak, as easing global bond yields and fresh foreign fund inflows revived investor appetite for riskier assets.
The 30-share BSE Sensex jumped 628.04 points, or 0.82 per cent, to settle at 77,537.72 after declining for four consecutive sessions. During the day, the index advanced as much as 701.43 points, or 0.91 per cent, to hit an intra-day high of 77,611.11.
The 50-share NSE Nifty also rebounded sharply after seven straight sessions of losses. It ended at 24,231.85, gaining 153.55 points, or 0.64 per cent.
The recovery was in line with a broader improvement in global market sentiment. A moderation in global bond yields helped ease concerns over tighter financial conditions and encouraged investors to return to equities. The softer yield environment also weighed on the US dollar, while a firmer rupee improved the attractiveness of emerging-market assets.
“Markets found much-needed relief after the US Treasury stepped in to contain the surge in global bond yields, triggering a strong broad-based rebound and ending the domestic market’s week-long losing streak,” Vinod Nair, Head of Research at Geojit Investments Ltd, said.
He noted that the intervention had dragged down the dollar and, together with the stronger rupee and easing yield pressures, improved the appeal of emerging markets. The rebound was broad-based, with IT and financial stocks emerging as key drivers of the recovery.
However, Nair cautioned that the market outlook remained guarded because of elevated crude oil prices. Persistent tensions between the US and Iran have kept concerns over oil supplies alive, potentially adding to inflationary pressures and affecting corporate profitability.
Among the Sensex constituents, Eternal, Kotak Mahindra Bank, ITC, Bajaj Finance, Axis Bank and UltraTech Cement were among the major gainers. In contrast, Tata Steel, InterGlobe Aviation, HCL Technologies and Titan ended lower.
Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, said domestic equities had ended higher after breaking a seven-session losing streak, which was the longest such run in nearly 11 months. He said easing global bond yields had encouraged investors to return to equities and marked a decisive shift from the cautious mood seen in recent trading sessions.
Foreign institutional investors also provided support to the market. According to exchange data, FIIs purchased equities worth Rs 407.99 crore on Wednesday, signalling some improvement in foreign investor sentiment after recent selling pressure.
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Global markets also provided a positive backdrop. South Korea's Kospi surged 5.89 per cent, while Japan's Nikkei 225, Shanghai's SSE Composite and Hong Kong's Hang Seng also closed higher. European markets, however, were trading mostly lower. US markets had ended in positive territory on Wednesday.
Despite the improved sentiment in equities, crude oil remained a concern. Brent crude, the global benchmark, rose 2.67 per cent to USD 93.91 per barrel, reflecting continued worries over geopolitical tensions and supply risks.
The Thursday recovery came after a difficult stretch for domestic equities. On Wednesday, the Sensex fell 325.78 points, or 0.42 per cent, to close at 76,909.68, marking its fourth consecutive session of decline. The Nifty had extended its losing streak to seven sessions, falling 76.60 points, or 0.32 per cent, to settle at 24,078.30.
The latest rebound therefore offered some relief to investors, although the combination of elevated crude prices, geopolitical uncertainty and global yield movements is likely to keep market volatility elevated in the near term.
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