Benchmark indices extended their winning streak on Thursday as falling crude oil prices and strength in banking stocks helped the market overcome weakness in information technology shares triggered by the US Federal Reserve’s hawkish commentary.
The S&P BSE rose 254.36 points, or 0.33%, to close at 77,409.98, while the NSE Nifty50 gained around 82 points, or 0.34%, to settle at 24,168. The benchmarks have now risen about 4.8% and 4.3%, respectively, over the last five trading sessions.
Markets remained range-bound for most of the day before witnessing a late surge in the final hour of trade, aided by expectations of foreign investor buying and continued optimism surrounding lower oil prices.
The biggest support for Indian equities continued to be the sharp correction in prices following the US-Iran peace agreement.
Brent crude fell another 2.1% to around $77.8 per barrel after the United States and Iran signed an interim agreement aimed at ending their conflict. WTI crude also remained below $76 per barrel.
Lower crude prices are a major positive for India as they help ease inflationary pressures, improve the current account balance, support the rupee and reduce concerns over imported inflation.
Banking and financial stocks emerged as the key drivers of Thursday’s gains.
Nifty Financial Services rose 0.73%, while Nifty PSU Bank gained 0.66% and Nifty Private Bank added 0.49%.
Among Sensex stocks, SBI climbed 1.64%, HDFC Bank gained 1.49%, Axis Bank rose 0.67% and ICICI Bank advanced 0.39%.
Vinod Nair, Head of Research at Geojit Investments Limited, said banking stocks outperformed due to expectations of strong credit growth and attractive valuations.
“The domestic equities traded within a range, maintaining a positive bias as the initial optimism surrounding the US-Iran peace deal was tempered by hawkish remarks from the US Fed. However, the sustained decline in crude oil prices and moderation in Indian bond yields could offset inflationary concerns in the second half of FY27,” he said.
While the broader market remained positive, IT stocks continued to face selling pressure after the Federal Reserve indicated that interest rates may remain higher for longer and could even rise later this year.
Nifty IT was the worst-performing sectoral index, falling 1.19%.
Infosys emerged as the biggest loser on the Sensex, declining 2.66%. Tech Mahindra fell 1.07%, TCS slipped 0.82% and HCLTech lost 0.41%.
Higher US interest rates can impact technology spending by global clients and reduce the attractiveness of emerging markets, making investors cautious on export-oriented IT companies.
Among the top gainers on the Sensex, IndiGo parent InterGlobe Aviation rose 2.73%, followed by Trent, which gained 2.52%.
BEL climbed 2.08%, NTPC advanced 1.86%, SBI rose 1.64% and HDFC Bank gained 1.49%.
Other notable gainers included Power Grid, Hindustan Unilever, Adani Ports and Tata Steel.
On the losing side, Infosys led the losses, followed by Tech Mahindra, Maruti Suzuki, TCS and HCLTech.
The broader market remained resilient, indicating continued investor appetite beyond large-cap stocks.
Nifty Smallcap 100 gained 0.44%, Nifty Midcap 100 rose 0.41% and Nifty Midcap 50 advanced 0.32%.
India VIX, the market’s fear gauge, declined 3.90% to 12.67, signalling easing volatility and improving investor confidence.
Going forward, investors will continue to monitor developments around the US-Iran peace agreement, movement in crude oil prices and signals from the US Federal Reserve regarding future interest rates.
While lower oil prices remain supportive for Indian equities, the outlook for IT stocks may remain uncertain until there is greater clarity on the US interest rate trajectory and global technology spending trends.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)