Sensex jumps 800 points as IT stocks lead rally despite US-Iran tensions
- Sensex surged 888 points to close at 77,654; Nifty rose 264 points to 24,250.
- IT stocks led gains, bucking a broader sell-off in Asian markets linked to AI sector concerns.
- The rally held despite fresh US-Iran geopolitical tensions weighing on global sentiment.
Markets open strong, extend gains through session
Indian equity benchmarks staged a sharp recovery on Wednesday, with the BSE Sensex jumping 888 points to settle at 77,654. The Nifty50 surged 264 points to close at 24,250. The rally came even as most Asian markets slumped on renewed fears about the artificial intelligence sector.
In early trade, the Sensex had gained over 1,000 points before paring some gains. The broader market also saw broad-based buying, with midcap and smallcap indices rising in tandem with the benchmarks.
IT stocks lead charge amid global AI rout
Information technology stocks were the biggest drivers of the rally, bucking a global sell-off in AI-related shares. Major IT firms saw strong buying interest, pushing the sectoral index up by over 3%. Analysts attributed the move to value buying after recent corrections and expectations of steady earnings.
The rally in tech stocks stood out because Asian peers like Japan, South Korea, and Taiwan had fallen sharply overnight. Those declines were triggered by a rout in US AI stocks after disappointing results from a key chipmaker.
Geopolitical tensions fail to dampen sentiment
The gains came despite fresh geopolitical risks. Reports of heightened tensions between the US and Iran had spooked global markets earlier in the week, pushing crude oil prices higher. India, a major oil importer, usually sees its markets react negatively to such spikes.
But domestic investors appeared to look past those concerns on Wednesday. Dealers said strong domestic inflows and optimism about the upcoming earnings season helped the market hold its ground.
Key factors behind the rally
- IT stocks rebounding from oversold levels, leading sectoral gains.
- Foreign portfolio investors turning net buyers after a period of selling.
- Positive cues from index heavyweights Reliance Industries and HDFC Bank.
- Easing fears of a sharper rate hike by the Reserve Bank of India.
The rally was broad-based, with banking, auto, and metal stocks also contributing. Market breadth was positive, with more than 1,800 stocks advancing on the BSE against 1,200 declines.
Volatility index India VIX eased slightly, indicating that traders were less anxious despite the global overhang.
What happens next: Markets will now watch for the monthly US jobs data due later this week and any escalation in Middle East tensions. Domestic cues like GST collections and auto sales numbers will also guide near-term direction.