Indian equity benchmarks opened the post-Dussehra session firmly in the green on Wednesday, with the BSE Sensex surging nearly 700 points and the NSE Nifty 50 reclaiming the 23,000 mark, as buying in information technology stocks and strong global cues powered a broad rebound from the previous session's sell-off.
In morning trade, the Sensex was trading 0.94 per cent, or 695 points, higher at 74,548.69, hitting an intraday high against its previous close of 73,852.90. The Nifty surged 0.86 per cent, or almost 200 points, to 23,086.95 from its previous close of 22,888.95. Earlier in the day, the benchmarks had opened higher, with the Sensex opening at 74,337.93, up 485.03 points or 0.66 per cent, and the Nifty opening at 23,016.00, up 127.05 points or 0.56 per cent.
GIFT Nifty had signalled a positive opening for the Indian markets, and the early gains tracked a firm trend across Asian equities. Japan's Nikkei 225 gained 1.3 per cent, while South Korea's Kospi advanced 3.7 per cent, reflecting stronger risk appetite across the region.
On Wall Street, the Dow Jones Industrial Average had risen 1.02 per cent and the S&P 500 gained 0.28 per cent in the previous session, though the Nasdaq Composite ended marginally lower, slipping 0.02 per cent. US stock futures traded higher on the back of upbeat earnings from major AI-linked companies, renewing investor interest in technology shares.
Information technology stocks led the charge on Dalal Street. Infosys shares jumped 2 per cent, reflecting renewed investor confidence in the tech sector. Sector-wise, the Nifty IT, Nifty PSU Bank, Nifty Cement, Nifty MidSmall IT & Telecom and Nifty Oil & Gas indices increased by up to 1.97 per cent. However, the Nifty Media and Nifty Chemicals indices were trading in the red, underscoring the selective nature of the rally.
The banking pack presented a mixed picture. Private banks slipped after their second-quarter results, while the State Bank of India bucked the trend and posted gains, highlighting how differently sectors are reacting to fresh financial updates. Bajaj Finance shares remained in focus after the lender reported strong quarterly profit growth.
The rebound comes after a bruising previous session. On Monday, the Sensex and the Nifty had fallen more than one per cent in a session that wiped out roughly 5 lakh crore rupees of investor wealth, and the market was shut on Tuesday for Dussehra. Wednesday's recovery, therefore, is as much a technical bounce as a fundamental re-rating, with investors assessing whether positive global cues can sustain a recovery in domestic equities.
Flow data offers a nuanced picture. In the last trading session on October 19, foreign institutional investors remained net sellers, offloading equities worth approximately 1,148 crore rupees, while domestic institutional investors continued to support the market with net purchases of around 3,200 crore rupees. The tug-of-war between foreign selling and domestic buying has been the defining feature of Indian equities in recent weeks.
Market experts advise caution even amid the rally. According to analysts, with Brent crude prices and US bond yields remaining elevated, the market is likely to remain under pressure and the sell-on-rally construct will continue in the near term. Brent crude, the global oil benchmark, was trading above 110 dollars a barrel, a level that raises import costs and weighs on sentiment.
However, the same experts note that improving earnings growth, fair valuations of large-cap stocks and strong domestic liquidity will support the market on declines. IT and banking, which have performed well in the second quarter and are attractively valued, are expected to see strong domestic-led accumulation on corrections, they said.
Notably, the Q2 results season has started on a positive note, and market action going forward is expected to be more stock-specific and results-sensitive.
All eyes are also on the primary market, where Jio Platforms' 3.2-billion-dollar IPO, the largest in Indian history, opens for subscription on Wednesday. The issue, whose anchor portion drew bids of more than 30 times the shares on offer, is expected to be a major focus for investors and has already lifted sentiment across the market, with related foreign inflows also supporting the rupee.
Elevated crude oil prices, Middle East supply risks and continued pressure on banking stocks remain key concerns for investors. The rupee's recent performance, foreign investor flows and developments around a possible US-India trade deal will also shape sentiment in the coming sessions.
For retail investors, the message from market veterans is familiar: the rally is welcome, but discipline matters. With Q2 earnings rolling in and global cues in flux, stock-specific opportunities are likely to matter more than index-level moves. Whether Wednesday's surge marks the start of a sustained recovery or merely a pause in a choppy market will become clearer as the earnings season unfolds and as foreign flows find a direction.
The scale of Monday's damage explains the relief in Wednesday's session. The previous trading day had seen roughly 5 lakh crore rupees of investor wealth erased as benchmarks fell more than one per cent, capping a difficult stretch for Dalal Street. Against that backdrop, the combination of a firm Asian open, strong Wall Street cues and the Jio IPO excitement was enough to pull buyers back in.
Looking ahead, the calendar offers its own landmarks. The National Stock Exchange has scheduled a special Muhurat trading session on November 8 — the first afternoon Muhurat session in 69 years — marking the start of the new Samvat year, traditionally an auspicious occasion for investors. Festive-season liquidity, combined with the ongoing Q2 results season, could keep volumes elevated in the coming weeks.
Sector watchers say the leadership of IT stocks is significant. After months of underperformance on global growth worries, technology shares are finding favour again as AI-linked earnings in the United States rekindle interest in the sector.
Infosys's 2 per cent jump on Wednesday reflects that renewed appetite, though analysts caution that the sustainability of the IT rally will depend on commentary from management teams about deal pipelines and client spending as results are announced.
Banking, by contrast, remains the market's problem child. Private lenders slipped on Wednesday after their Q2 numbers, and continued pressure on banking stocks is listed among the key concerns for investors, alongside elevated crude prices and Middle East supply risks. The divergence between a strong Nifty IT and a struggling set of private banks is a reminder that this is a stock-pickers' market, where index levels can mask sharp rotations beneath the surface.
(Reporting based on NDTV, ABP News and IANS.)