Sensex surges 300 pts from day's low, Nifty above 25,200: 3 key reasons behind market rise

Sensex, Nifty rebounded on the back of foreign fund inflows, easing volatility and buying in IT stocks.

The equity benchmark indices Sensex and Nifty settled marginally higher on Wednesday, rebounding from early losses, supported by foreign fund inflows, easing volatility and buying in IT stocks.

Rising for the second day in a row, the Sensex edged up 63.57 points or 0.08 percent to settle at 82,634.48. During the day, it hit a high of 82,784.75 and a low of 82,342.94. The Nifty ended 16.25 points or 0.06 percent higher at 25,212.05.

Mahindra & Mahindra, Wipro, Nestle India, State Bank of India and Tech Mahindra were among the major gainers, rising up to 3 percent intraday.

Key factors behind the market upmove:

1. FII inflows: Foreign Institutional Investors (FIIs) bought shares worth Rs 120.47 crore on Tuesday, as per exchange data. Continued FII participation reflects positive sentiment towards Indian equities.

2. Easing India VIX: The India VIX, a measure of market volatility, declined by 2 percent to 11.25. A lower VIX indicates reduced investor fear and more stable market conditions, often aiding sentiment.

3. IT sector buying: The Nifty IT index rose up to 1 percent as investors engaged in value-buying after recent declines. The IT pack had come under pressure post Tata Consultancy Services’ Q1 results, which highlighted muted demand. While analysts foresee a soft quarter ahead, selective buying emerged at lower valuations.

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