Sensex Up, IT Down: 5 Reasons Why Markets Are Trading Higher

Indian benchmark indices opened higher on Wednesday, supported by broad-based buying across sectors, with banking, metal, pharma and PSU stocks lending support, while weakness in information technology shares capped sharper gains.

At the opening bell, the BSE Sensex rose 453.05 points or 0.6% to 75,062.03, while the NSE Nifty50 advanced 163.60 points or 0.69% to 23,576.20.

However, gains moderated as the session progressed. At around 10 am, the Sensex was trading higher by 102 points or 0.17% at 74,747, while the Nifty gained around 67 points to trade near 23,465.

Market breadth remained positive, reflecting buying interest beyond benchmark indices. The Nifty Midcap100, Smallcap100 and MidSmallcap400 indices rose around 0.5%-0.6%, indicating continued appetite for broader market stocks.

Value Buying Returns After Sharp Correction

One of the key factors supporting the market was continued value buying after the recent correction.

Benchmark indices had fallen nearly 4% over the previous four sessions due to elevated crude oil prices, persistent foreign selling and concerns following Prime Minister Narendra Modi's recent austerity appeal.

After the steep decline, investors selectively accumulated beaten-down stocks, especially in sectors that had witnessed sharp corrections.

The broader market reflected this trend more clearly, with midcap and smallcap stocks attracting fresh buying interest. Analysts said investors are gradually returning to selective sectors after the recent market weakness.

The recovery also indicates that despite macro concerns, domestic investors continue to utilise corrections as buying opportunities.

Banking, Pharma and Metals Drive Buying

Buying interest remained visible across several key sectors including banking, pharma and metals.

Nifty Pharma emerged as the top sectoral gainer and rose 1.21%, while healthcare, chemicals, cement and metal indices also traded firmly higher.

Nifty Metal gained 0.77%, while auto and PSU Bank indices advanced around 0.65%. Financial stocks also supported the upmove, with Nifty Bank rising 0.54% to trade around 53,745.

Among individual stocks, Power Grid, Adani Ports & Special Economic Zone, NTPC, Bharti Airtel and M&M were among the top gainers.

The gains in banking and pharma shares helped offset weakness in information technology stocks and kept benchmark indices in positive territory.

Volatility Eases, Supporting Market Sentiment

Another positive factor for the market was the easing in volatility levels.

India VIX, commonly referred to as the market fear gauge, declined 2.74% to 18.90.

A lower VIX generally indicates improving investor confidence and expectations of relatively stable market conditions.

The decline in volatility came after recent sharp spikes in market uncertainty triggered by geopolitical developments and rising oil prices.

Analysts said cooling volatility levels often support risk appetite and encourage investors to return to equities after sharp corrections.

IT Stocks Continue To Remain Under Pressure

Despite gains across broader sectors, IT stocks remained under pressure and limited the overall market recovery.

The Nifty IT index fell 1.81%, emerging as one of the biggest sectoral losers.

Heavyweight technology stocks including Infosys, TCS, HCLTech and Tech Mahindra traded lower during early trade.

TCS, Tech Mahindra and HCLTech also featured among the top laggards on the Nifty pack.

Analysts said concerns around slowing technology spending and changing global AI trends continue to impact sentiment around IT shares.

Rupee Weakness And FII Selling Remain Key Risks

Despite the market recovery, macroeconomic concerns continue to remain in focus.

The Indian rupee weakened further to a fresh all-time low amid sustained foreign investor outflows and elevated crude oil prices.

Foreign portfolio investors have sold Indian equities worth $23.22 billion so far in 2026, already surpassing last year’s annual outflow levels.

At the same time, Brent crude remained elevated near $106 per barrel amid little progress in US-Iran negotiations.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said continued rupee depreciation is emerging as a major macroeconomic risk.

He said the rupee, which started the year near 90 against the dollar, has weakened sharply and could move towards 100 if crude prices remain elevated for a prolonged period.

Vijayakumar added that continued foreign selling and stronger AI-linked markets such as the US, South Korea, Taiwan and Japan are pulling capital away from India.

According to him, sectors such as pharmaceuticals and textiles could benefit from rupee weakness, while IT may continue to face pressure despite being an export-oriented sector due to concerns linked to global AI developments.