Sensex settles 600 pts higher, Nifty ends above 23,750: Buying in IT shares among key factors behind market gain

Stock market today news: Urban Company shares rise in trade. 

• Sensex and Nifty up for third session, driven by IT stocks.
• Nifty IT index rises 2.5%, ending six-session decline.
• India VIX falls 5 percent, signaling lower market volatility.

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The equity benchmark indices Sensex and Nifty extended their gains to a third consecutive session on Wednesday by rising nearly 1 percent, amid sharp buying interest in information technology (IT) shares and positive cues from Asian markets.

The Sensex jumped 633.29 points or 0.83 percent to settle at 76,704.13. During the day, it soared 929.38 points or 1.22 percent to 77,000.22. The Nifty surged 196.65 points or 0.83 percent to end at 23,777.80.

Tech Mahindra, HCL Technologies and Tata Consultancy Services were among the top gainers in the Nifty50 pack, rising up to 4 percent, while Coal India and HDFC Bank declined up to 2 percent. Market breadth was positive as about 2801 shares advanced, 746 shares declined and 150 shares unchanged.

Almost all the major Nifty sectoral indices were in the green, barring metal shares. The Nifty smallcap100 and Nifty midcap100 rose 1.3 percent and 1.5 percent, respectively.

Key factors behind market rise

1) Buying in IT shares: Buying in IT stocks remained a key driver of the uptrend, with the sector witnessing value buying after recent losses. The buying was seen after brokerage firm CLSA brushed off disruption concerns linked to the latest AI tools from Anthropic and OpenAI. The Nifty IT index gained 2.5 percent, snapping a six-session losing streak, while several IT shares rose over 3 percent.

2) Firm Crude prices: Crude oil prices also provided support to sentiment after the Iraqi government and Kurdish authorities reached a deal to resume oil exports via Turkey's Ceyhan port. Brent crude, the global benchmark, declined 1.46 percent to USD 101.9 per barrel.

"Despite the uncertainty regarding the war, markets have staged a bounce back. One factor that enabled this recovery is crude remaining around the USD 102 level and fears of spiking above USD 120 not materialising," said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

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3) Strong global cues: Firm global cues further aided the rally. South Korea’s Kospi surged nearly 4 percent, while Japan’s Nikkei 225 index climbed over 2 percent. US markets had ended higher on Tuesday.

4) Value buying: Buying at lower levels supported the benchmarks. The Sensex and Nifty have risen about 2 percent so far this week, recovering part of the steep losses recorded during their worst week in years. Such buying interest typically emerges after sharp corrections, as investors accumulate fundamentally strong stocks at relatively lower valuations, lending support to indices.

"The market is rising in anticipation that there won't be further escalation in ​the Middle East after U.S. allies refused to send navies to Strait of ​Hormuz," said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities. "But the situation remains ‌fluid ⁠and any uptick in crude oil prices towards $120-$130 per barrel could trigger a fresh round of selling," Agrawal said.

5) India vix declines: The India VIX, the market’s volatility gauge, declined 5 percent to 18.84. A fall in the VIX indicates easing investor anxiety and improved risk appetite, which generally supports stability and upward movement in equities.

Technical outlook

According to Anand James, Chief Market Strategist at Geojit Investments, the Nifty has sustained momentum after achieving the 23,600 level. "Expect the 23,700 region to pose a challenge. A direct move above this is required to target 23,990. The 23,550 level will need to hold in case of early weakness to support further upside. A breach could drag the index towards the 23,300-23,130 zone, though a sharp fall is less likely," he said.

(With inputs from Reuters)

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