Markets End Higher; Sensex Gains 274 Points As IT Stocks Extend Winning Run

Indian benchmark indices ended higher on Thursday, supported by continued buying in information technology (IT) stocks, sustained foreign institutional investor (FII) inflows and easing crude oil prices, even as investors remained cautious over the US Federal Reserve's hawkish stance and geopolitical tensions in West Asia.

The Sensex rose 273.55 points, or 0.35%, to close at 77,928.15, while the Nifty 50 gained 66.95 points, or 0.28%, to settle at 24,317.15.

IT stocks remained the biggest driver of the market, with the Nifty IT index extending its July gains to 20.3%, putting the sector on track for its biggest monthly rally in six years.

The index has gained nearly 10% this week as investors rotated into Indian software stocks amid weakening sentiment towards global semiconductor and artificial intelligence (AI)-linked companies.

Market participants believe India is emerging as a relative hedge against the broader AI-led selloff, given its limited exposure to semiconductor manufacturers and pure-play AI companies.

FII Buying, Lower Crude Support Sentiment

Foreign institutional investors remained net buyers for another session, purchasing equities worth ₹2,981.87 crore on Wednesday.

Meanwhile, Brent crude fell 1.26% to $89.60 per barrel, providing relief to domestic markets by easing concerns over inflation, India's import bill and corporate input costs.

The combination of sustained foreign inflows and softer crude prices helped offset global uncertainty arising from elevated US bond yields and geopolitical tensions.

Technical Setup Remains Positive

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the benchmark indices maintained their positive momentum throughout the session after trading comfortably above the 20-day Simple Moving Average (SMA).

He said the formation of a bullish candle on the daily charts and an uptrend continuation pattern on intraday charts suggested the rally could extend further.

According to Chouhan, 24,200 on the Nifty and 77,500 on the Sensex will act as key support levels. If these levels hold, the Nifty could move towards 24,450-24,500, while the Sensex may advance to the 78,300-78,500 zone. A break below the support levels, however, could weaken the ongoing uptrend.

Global Risks Keep Markets Range-Bound

Vinod Nair, Head of Research at Geojit Investments, said the Federal Reserve's decision to keep interest rates unchanged was widely expected, but its continued focus on inflation kept global markets cautious.

He noted that higher US bond yields and renewed volatility in crude oil prices due to tensions in West Asia created external headwinds for equities.

However, Nair said strengthening FII inflows, a firmer rupee and encouraging June-quarter earnings supported domestic sentiment, prompting investors to use market declines as selective buying opportunities despite sharp intraday volatility.