Sensex, Nifty Snap Two-Day Losing Streak as IT Stocks Rally

Indian equity benchmarks bounced back on Friday, breaking a two-session losing run as a strong rally in technology stocks more than offset pressure on banking and consumer-facing names. The BSE Sensex closed up 330.92 points, or 0.43 per cent, at 77,264.51, while the Nifty 50 added 84.80 points, or 0.35 per cent, to settle at 24,175.65.

IT stocks lead the recovery

The standout move of the session came from information technology shares, with the Nifty IT index surging 3.51 per cent, its best single-day performance in some time, after two consecutive sessions of losses. The rally tracked stronger global sentiment toward technology and AI-linked spending following an upbeat set of quarterly results and forward guidance from Nvidia overnight, which lifted risk appetite for tech stocks across Asia.

Coforge led gains among large IT names, rising close to 6 per cent, followed by LTIMindtree, Tata Consultancy Services and Persistent Systems, all of which posted gains between 4 and 5 per cent. Tech Mahindra, Infosys, HCL Technologies and Wipro also advanced, with Wipro's move helped along by news of an expanded artificial intelligence partnership with Google Cloud announced during the session. Pharmaceutical and metal stocks also participated in the advance, while FMCG and select consumer durable names lagged.

Broader market and currency moves

Market breadth stayed positive through the session, with advancing shares outnumbering decliners on the BSE. The mid-cap and small-cap indices posted more modest gains than the headline benchmarks. In currency markets, the rupee firmed marginally against the dollar, while the yield on India's 10-year benchmark government bond moved higher, reflecting some caution ahead of a closely watched speech from US Federal Reserve Chair Kevin Warsh at the Jackson Hole economic symposium later in the global trading day.

Global backdrop

Overnight, Wall Street closed higher, with the Nasdaq Composite jumping more than 1.5 per cent on the back of Nvidia's results, while the S&P 500 and Dow Jones Industrial Average posted smaller gains. Asian markets were mixed as some of the initial enthusiasm around Nvidia's outlook faded through the session, with Japan's Nikkei higher even as South Korea's Kospi slipped on weakness in chip stocks.

Crude oil prices eased slightly during the session even as tensions around the Strait of Hormuz continued to simmer, providing a modest tailwind for Indian markets given the country's heavy reliance on imported energy. Investors are now looking ahead to Warsh's remarks for signals on the path of US interest rates, a factor that has weighed on emerging-market sentiment in recent weeks given elevated bond yields globally.

Trading in newly listed shares also drew attention, with Tempsens Instruments settling well above its issue price after a strong debut, while several ongoing IPOs, including Lumino Industries and Priority Jewels, continued to see healthy subscription interest from investors during the session.

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