IT, banking stocks power rally as markets rebound from previous session’s losses

Indian benchmark equity indices staged a strong recovery on Wednesday, rebounding sharply from the previous session's losses as easing crude oil prices, gains in private banking and information technology stocks, and optimism surrounding a potential India-US trade agreement boosted investor sentiment.

The BSE Sensex rose 837.06 points, or 1.10 per cent, to 77,037.74 by 1:20 pm, while the NSE Nifty advanced 223.35 points, or 0.94 per cent, to 24,047.45.

The gains came a day after markets witnessed a steep correction, with the Sensex falling 893.39 points and the Nifty declining 278.80 points amid concerns over global uncertainties and profit-booking.

A key driver of Wednesday's rally was the decline in crude oil prices. Brent crude, the global benchmark, slipped to around USD 76 per barrel, hovering near four-month lows as concerns over disruptions to shipping through the Strait of Hormuz eased. Lower oil prices are generally viewed as favourable for India, which imports the majority of its crude requirements.

Market participants also drew comfort from signs that foreign institutional investor selling may be moderating. Overseas investors were net buyers of Indian equities on Tuesday, purchasing shares worth Rs 17.86 crore, helping improve market confidence.

Sentiment received an additional boost after indications that India and the United States are nearing the conclusion of a bilateral trade agreement. Reports that negotiations are progressing towards a mutually beneficial arrangement raised hopes of stronger trade ties between the two countries.

Positive cues from Asian markets further supported domestic equities. Major regional indices, including South Korea's Kospi and Hong Kong's Hang Seng, traded higher, reflecting improved investor appetite for risk assets.

Technology stocks were among the standout performers, with the Nifty IT index rising nearly 1 per cent. Tech Mahindra led the sectoral gains, while Infosys and Tata Consultancy Services also traded higher as investors returned to large-cap technology counters.

Private sector banks played an equally significant role in lifting the benchmarks. Heavyweights such as HDFC Bank and ICICI Bank attracted strong buying interest, helping the Bank Nifty climb more than 1.5 per cent and providing broad support to the market rally.

Meanwhile, market volatility eased, with the India VIX index falling 2.65 per cent to 13.57, signalling reduced investor anxiety after recent turbulence.

Analysts, however, cautioned that market sentiment remains sensitive to global developments. According to Rajesh Palviya, Head of Research at Axis Direct, the Nifty needs to sustain levels above 23,950 to extend the recovery towards the 24,100-24,150 range. He noted that support remains near 23,780, while a break below that level could trigger renewed profit-booking pressure.

While the sharp rebound has improved near-term sentiment, market participants are expected to remain focused on global technology stocks, crude oil movements and developments surrounding international trade negotiations for further direction.

With PTI inputs