Indian equity markets staged a strong recovery today, ending higher on the back of short covering, renewed strength in the IT sector, and positive global cues. The sharp move came after a volatile start to the week, with investors covering their positions and domestic institutions stepping in to absorb selling pressure.
Market Performance Overview
The Nifty 50 climbed 1.2% to close above key resistance levels, while the Sensex advanced 1.4%, fueled by aggressive buying in select sectors. The indices opened on a cautious note but gained momentum through the day as short covering intensified.
Positive sentiment in global markets, easing US Treasury yields, and a softer dollar added to investor confidence, providing support to risk assets.
Sectoral Highlights – IT Leads the Charge
The Nifty IT index surged 2%, emerging as the key driver of today’s rally. The sector gained traction due to multiple positive triggers, including:
- Coforge rallying 9.7% after securing a $1.56 billion deal with Sabre Corp, reinforcing confidence in mid-cap IT firms.
- Infosys advancing 1.5%, benefiting from an upgrade by JP Morgan, which cited stronger revenue visibility.
- Reports of potential US tariff relief, reducing concerns over trade restrictions impacting the Indian IT sector.
FII and DII Trading Activity
Institutional flows played a crucial role in market movements today. Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹2,895 crore. However, Domestic Institutional Investors (DIIs) stepped in aggressively, purchasing ₹3,370.6 crore worth of stocks.
This DII buying was closely linked to short covering, as investors capitalized on the market dip and provided much-needed support to equity benchmarks.
Commodities Market Update
Gold and silver prices remained firm, reflecting ongoing economic uncertainties:
- Gold prices surged, with 24-carat gold trading at ₹87,563 per 10 grams in Delhi and ₹86,080 in Mumbai.
- Silver prices remained stable at around ₹98,000 per kilogram.
- The rally in gold was largely driven by a weaker US dollar, persistent global inflation concerns, and geopolitical risks, prompting investors to seek safe-haven assets.
Key Market Moving Event for the Week
A significant macroeconomic event that could influence market sentiment is the Bank of England’s outlook on global economic risks. Governor Andrew Bailey underscored the impact of rising trade tensions and the need for coordinated policy responses. Investors will closely monitor any global monetary policy signals that could affect liquidity and risk appetite.
Outlook
Despite today’s strong rebound, market volatility remains a key concern amid global trade uncertainties and institutional repositioning. Traders and investors should stay cautious and track central bank commentary for future market direction.