Indian stock markets on Thursday staged a strong rebound, with the Nifty closing above the 22,900 mark. Broad-based buying was seen across sectors, barring auto stocks.
The on a muted note but gained momentum as the session progressed, led by IT and banking stocks. Markets sentiment was supported after the US Federal Reserve kept its key policy rate unchanged in the 3.75–4% range, in line with market expectations.
At close, the Sensex was up 905.01 points or 1.24 percent at 74,151.04, and the Nifty was up 237.90 points or 1.05 percent at 22,936.75. Nifty midcap and smallcap indices rising 1 percent each.
Indian Rupee traded in a range with marginal strength of around 0.04% at 95.25, following the US Federal Reserve’s decision.
What Triggered The Sensex Rally?
US Fed rates:
The US Federal Reserve’s decision to keep interest rates unchanged provided support to global equity markets. Investors tracked the Fed’s policy outlook for clues on borrowing costs, liquidity and the flow of foreign capital into emerging markets like India.
Buying in heavyweight stocks:
Buying in heavyweight stocks that has lifted the benchmark indices. Adani Ports led the Sensex gainers, while Power Grid, Kotak Mahindra Bank, Hindustan Unilever, NTPC, ITC, Reliance Industries, Titan, TCS and Infosys also advanced. The FMCG sector was among the leading gainers.
Foreign investors comeback:
Foreign institutional investors made a come back buying Indian equities worth approximately Rs 872 crore, according to provisional exchange data. Domestic institutional investors also bought shares worth around Rs 643 crore.
Vinod Nair, Head of Research, Geojit Investments Limited said, “Indian equities rallied as the US Fed’s rate pause, marginal easing in crude and renewed institutional buying improved risk appetite despite a challenging external backdrop. FMCG led gains on resilient consumer demand, while financials, IT, realty and power strengthened, with mid- and small-caps also participating, signalling healthier market breadth. Recent foreign buying alongside sustained domestic institutional support has also improved the liquidity backdrop.”
“The broader thesis remains supported by selective earnings resilience and domestic demand stability, although elevated input costs could test margin durability. However, elevated Brent, rupee weakness, rising domestic bond yields and persisting geopolitical uncertainty remain key risks. Near-term momentum will hinge on domestic earnings breadth, continuity of foreign flows and moderation in energy prices while the global inflation trends and policy signals from other major central banks could keep yields and capital flows volatile.”