Sensex Turns Higher, Nifty Above 24,250 As Markets Shake Off Weak Opening

Indian benchmark indices recovered from early losses to trade in positive territory on Thursday, as buying in IT stocks helped markets shrug off concerns over elevated crude oil prices, the US Federal Reserve's policy decision and renewed geopolitical tensions in West Asia.

The Sensex initially opened 146.02 points, or 0.19%, lower at 77,508.58, while the Nifty 50 fell 36.85 points, or 0.15%, to 24,213.35.

However, by around 9:30 am, the benchmarks had erased their losses. The Sensex was up around 30 points at 77,685, while the Nifty traded above 24,266, gaining around 16.5 points.

Market breadth was mixed, with 950 stocks advancing, 1,275 declining and 163 remaining unchanged.

Among the Nifty constituents, Infosys, Tech Mahindra, ONGC, Hindalco and HCL Technologies were the top gainers, while UltraTech Cement, Adani Ports, Asian Paints, Eternal and InterGlobe Aviation were among the major losers.

IT Buying Offsets Global Headwinds

The recovery was led by information technology stocks, extending the sector's recent outperformance despite weak global cues.

Analysts said domestic equities continue to draw support from sustained foreign portfolio investor (FPI) inflows, a stable rupee and the ongoing June-quarter earnings season.

Long-term market trends also remain supportive, with companies delivering strong sales growth and high return on equity continuing to outperform.

Fed Pause, Crude Oil Keep Investors Cautious

Investor sentiment remained cautious after the US Federal Reserve kept interest rates unchanged at 3.50%-3.75%.

Although the decision was widely expected, the policy outcome was viewed as relatively hawkish after three members voted in favour of a rate hike, highlighting persistent inflation concerns and keeping future policy decisions dependent on incoming economic data.

Meanwhile, Brent crude remained close to $90 per barrel following renewed tensions between the United States and Iran, raising concerns over inflation, India's current account deficit and pressure on the rupee if elevated prices persist.

Wall Street ended lower overnight ahead of major technology earnings, while Asian markets traded with a modest positive bias.

Derivatives Indicators Remain Supportive

Despite global uncertainties, derivatives data pointed to improving investor confidence.

India VIX eased to 12.01, while strong put writing around the 24,200 strike and a Put-Call Ratio (PCR) of 1.17 indicated constructive market positioning.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the Indian market continues to display signs of a potential breakout despite several external headwinds.

"The Indian market construct indicates a breakout trend. But the potential breakout is being constrained by many headwinds. The spike in Brent crude again to near $90 following the escalation of the US-Iran conflict is a strong headwind," he said.

Vijayakumar added that while the Fed's decision to pause rates was expected, the 9-3 split vote suggested that a rate hike could come sooner than markets anticipate, pushing US bond yields higher and weighing on Wall Street.

He, however, noted that India's market could continue to outperform as foreign investors rotate away from global semiconductor stocks. According to Vijayakumar, persistent FPI buying, weakness in South Korea's KOSPI and the resilience of the Indian economy are likely to provide fundamental support to domestic equities.