Sensex Rises 549 Points, Nifty Gains 128 As IT, Metal Stocks Rally

Indian equity benchmark indices traded higher on Thursday, tracking gains across Asian markets as global bond yields eased after the US Treasury announced steps aimed at bringing down borrowing costs.

At around 9:45 am, the Sensex was up 548.94 points, or 0.71%, at 77,458.62, while the Nifty gained 128.30 points, or 0.53%, to trade at 24,206.60.

Capital goods, metal and IT stocks led the gains. The BSE IT index rose 417 points to 29,601, lending support to the benchmark indices.

Brent crude, however, remained above the $91-a-barrel mark, trading at $91.94, keeping pressure on the outlook for Indian equities.

Asian Markets Rally As Bond Yields Ease

Asian equities rallied on Thursday after two sessions of losses, supported by a decline in bond yields and improved appetite for risk assets.

South Korea's Kospi surged 5.8%, with technology stocks rebounding sharply following their recent sell-off. Japan's Topix rose 1.1%, while Hong Kong's Hang Seng gained 1.2% and the Shanghai Composite advanced 0.7%.

US equity futures also pointed to a mildly positive opening, with S&P 500 futures gaining 0.2%. US equities ended modestly higher on Wednesday as declining bond yields provided some relief to stocks amid concerns over elevated borrowing costs.

US Treasury yields fell sharply after the US Department of the Treasury announced plans to at least double its government debt buybacks. The benchmark 10-year note yield fell to around 4.64%-4.66%, while the 30-year bond yield declined around 10 basis points to near 5.19%.

The decline in US bond yields provides a supportive backdrop for global equity markets.

FII Buying, Lower VIX Support Market Sentiment

Foreign institutional investors turned net buyers for a second consecutive session, purchasing Indian equities worth ₹407 crore on August 19.

Meanwhile, the India VIX, a measure of expected market volatility, declined nearly 4% to 10.91, indicating lower uncertainty among investors.

Market strategist VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market, which had been steadily downtrending for the last 12 trading sessions, appeared set for a short-term reversal.

"The market is in oversold territory and a mild rally triggered by short-covering is likely. The decline in U.S. bond yields indicates a positive potential construct for equity markets, globally," he said.

Vijayakumar also highlighted the relative strength of mid- and small-cap stocks compared with large-caps. He said the broader-market rally has fundamental support from revenue and earnings growth, with segments such as CDMO, precision engineering and power infrastructure performing well.

"Part of the good news in these segments are already in the price, but there is more room for price appreciation in these segments," he said.

He also said LIC receiving approval to acquire up to 9.99% equity in HDFC Bank is significant.