Indian stock markets staged a smart recovery on Thursday after opening with deep cuts. The benchmark BSE Sensex, which had fallen nearly 600 points in early trade, rebounded strongly and managed to recover about 450 points from the day’s low. The NSE Nifty50 also bounced back, reclaiming the 24,650 mark by afternoon, offering some relief to investors after a shaky start.
The comeback in equities came amid a volatile global setup, where weak overnight cues from Wall Street and concerns over global trade tensions had initially spooked traders. However, domestic triggers and selective buying in heavyweight stocks helped Indian markets recover.
Here are the three key reasons behind the market recovery:
1. Strong buying in banking and IT stocks
After the initial sell-off, heavyweight banking and IT counters attracted strong buying interest. Shares of HDFC Bank, ICICI Bank, Infosys, and TCS provided much-needed support to the benchmarks. Market experts said that investors were quick to lap up quality large-cap stocks at lower levels, leading to a short-covering rally.
The Nifty Bank index, which was down nearly 1% in early trade, rebounded and turned positive by afternoon. The IT index also recovered sharply, tracking the rupee’s weakness against the US dollar, which usually boosts export-oriented companies.
Analysts noted that banking and IT together hold significant weightage in the Sensex and Nifty. Hence, recovery in these sectors played a pivotal role in lifting overall market sentiment.
2. Resilience in global markets and crude oil relief
While Indian equities opened lower in line with weak Asian and US cues, global markets showed signs of stabilisation during the day. European markets opened on a firmer note, and US stock futures also indicated some relief, which provided comfort to investors.
Another supporting factor was the easing of crude oil prices. Brent crude slipped below $84 per barrel, alleviating concerns about India’s import bill and inflationary pressures. Lower crude prices often benefit Indian equities as they reduce input costs for multiple industries, improve trade balance, and give the Reserve Bank of India (RBI) more flexibility in its monetary stance.
This development gave confidence to traders that the Indian market’s downside could be limited, encouraging bargain hunting at lower levels.
3. Domestic economic strength and FII inflows
Despite global headwinds, India’s domestic economic fundamentals remain strong. Recent high-frequency data, such as robust GST collections, healthy manufacturing activity, and firm credit growth, have underlined the resilience of the Indian economy.
In addition, market participants highlighted that foreign institutional investors (FIIs), who were net sellers in the past few sessions, slowed down their selling pressure. Reports suggest that FIIs have started turning selective buyers in Indian equities, especially in financials and IT.
The optimism surrounding India’s long-term growth story, supported by government reforms, infrastructure push, and corporate earnings outlook, helped restore investor confidence and supported the rebound.
Market snapshot
By late afternoon trade, the Sensex was quoting around 79,000, up nearly 150 points from the previous close, after recovering nearly 450 points from its intraday low. The Nifty50 hovered around 24,650, up about 50 points.
Among sectoral indices, banking, IT, FMCG, and pharma led the recovery, while metal and realty stocks continued to remain under pressure. Midcap and smallcap indices also witnessed buying interest, though they underperformed the benchmarks.
Market breadth improved significantly compared to the morning session, with more stocks advancing than declining on the NSE.
Expert view
Market experts believe that volatility will likely remain high in the near term, given the uncertain global environment. However, strong domestic fundamentals may limit the downside for Indian equities.
“After the sharp fall in the morning, the Indian market witnessed a swift rebound led by banking and IT heavyweights. The resilience of domestic macros and expectations of healthy corporate earnings continue to support medium-term optimism. Investors should remain cautious but use dips as an opportunity to accumulate quality stocks,” said a senior market strategist.
Another analyst noted that foreign flows and movement in global crude oil prices will remain key drivers for the market in the short run. “If FIIs continue to moderate selling and crude stays below $85 per barrel, Indian equities may continue to witness recovery rallies,” he added.
What lies ahead?
Going forward, traders will keep a close eye on:
- US economic data and its impact on Federal Reserve policy stance
- Movement in global bond yields and crude oil prices
- FIIs’ investment pattern in Indian equities
- Upcoming domestic GDP and inflation numbers
While volatility is expected to persist, the overall outlook for Indian equities remains constructive. Experts suggest that investors should stay selective, focus on fundamentally strong companies, and avoid chasing short-term rallies.
Conclusion
The Indian stock market’s recovery on Thursday showcased the resilience of domestic investors and the strength of underlying fundamentals. Although global uncertainty remains a challenge, factors such as buying in large-cap sectors, easing crude prices, and domestic economic momentum played a crucial role in lifting sentiment.
For investors, the message is clear: while caution is necessary in the short term, India’s long-term growth story continues to attract confidence, and any dip could provide an opportunity for accumulation.