Markets Rally For Second Day; Sensex Jumps Nearly 800 Points, Nifty Gains 1%

Indian benchmark indices extended gains for a second consecutive session on Thursday, with the BSE Sensex rising 790 points and the NSE Nifty climbing more than 1%, despite continued pressure from elevated crude prices, rupee weakness and foreign investor selling.

The Nifty50 ended the day at 23,689.60, up 277 points or 1.18%, while the Sensex closed 790 points higher at 75,398.72, gaining 1.06%.

The recovery was broad-based, supported by banking, pharma and metal shares, while investor sentiment improved amid hopes of policy measures to support the rupee and stronger global cues.

Bharti Airtel emerged as the biggest Sensex gainer, jumping nearly 6%. Eternal, HDFC Bank, Adani Ports, M&M, Sun Pharma, Bajaj Finance, NTPC and Kotak Mahindra Bank also gained between 1-3%.

However, information technology stocks continued to remain under pressure. Infosys, Tech Mahindra, HCLTech and TCS declined by up to 2.5%.

Bond Tax Relief

One of the biggest triggers for the market recovery came from reports that the government is considering reducing taxes on foreign investments in Indian bonds.

According to a Bloomberg report, the Finance Ministry is evaluating an RBI recommendation to lower taxes on foreign bond investors to align India's policies with global standards.

The move is aimed at attracting overseas capital and improving liquidity amid sustained foreign outflows from Indian markets.

Following the report, Indian bonds gained and the rupee also recovered from intraday weakness. The benchmark 10-year bond yield declined by around 2 basis points to 7.03%.

Analysts believe expectations of policy support helped improve investor sentiment and raised hopes of fresh foreign inflows.

Optimism Around Trump-Xi Meeting

Global sentiment also remained supportive after investors tracked developments surrounding the meeting between US President Donald Trump and Chinese President Xi Jinping.

According to White House commentary, both countries agreed on maintaining the Strait of Hormuz as a free shipping route while discussions also touched upon energy cooperation.

Investors interpreted the developments as a positive signal for global trade and geopolitical stability.

Global markets largely remained supportive. South Korea's Kospi gained nearly 2%, while major European indices including Germany's DAX, France's CAC and the UK's FTSE traded higher.

Wall Street also ended firmly in the green in the previous session, with the technology-heavy Nasdaq gaining over 1%.

Metal, Pharma Stocks Lead Rally

Sectorally, metal and pharma stocks led Thursday's rally. The Nifty Metal index rose nearly 2%, while Nifty Pharma advanced around 3%.

Vinod Nair, Head of Research at Geojit Investments, said pharma and healthcare gained due to sectoral rotation, while metals benefited from rising commodity prices and improving demand expectations from China.

He said investor confidence improved despite crude prices remaining elevated and the rupee touching record lows.

Nair added that optimism around possible government measures to support the rupee and stem capital outflows also supported market sentiment.

Sugar, Jewellery Shares Under Pressure

Despite the broader market recovery, sugar and jewellery stocks continued to witness heavy selling.

Sugar stocks fell sharply after the government imposed an immediate ban on sugar exports until September 30 to ensure adequate domestic supplies and control prices.

Dhampur Sugar Mills declined nearly 7%, while Dwarikesh Sugar Industries fell over 6%. Uttam Sugar Mills, Bajaj Hindusthan Sugar and Mawana Sugars also witnessed sharp declines.

Jewellery stocks also remained weak. Shares of Kalyan Jewellers continued their decline and have now corrected over 40% in less than 10 months.

Heavy selling was also seen in other jewellery names including Senco Gold, Sky Gold, Thangamayil Jewellery and Titan Company.

Investor wealth across jewellery companies has fallen by nearly ₹60,000 crore amid weak sentiment and concerns over discretionary spending.

Technical Indicators Suggest Sideways Movement

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said the Nifty has now ended in the green for the second consecutive session, indicating a temporary pause in recent weakness.

However, he noted that the index continues to trade below key moving averages, suggesting the broader short-term trend remains under pressure.

According to Shah, the daily RSI has rebounded from near the 40 mark and is currently moving within the 40-60 range.

He said this behaviour generally signals a phase of sideways consolidation rather than a strong directional trend.

Shah added that stock-specific action is likely to dominate in the near term and a decisive break below the RSI's 40 level could trigger renewed bearish momentum.