The Indian stock market witnessed a significant uptick on Wednesday as the Sensex surged by approximately 540 points to reach 77,592, while the Nifty 50 climbed 150 points to 24,202. This rally occurred as the volatility measure, India VIX, dropped over 3% to 13.31.
Leading the gains on the Sensex were shares of Asian Paints, Bajaj Finance, Axis Bank, Bharti Airtel, IndiGo, and Reliance Industries, each rising around 1%. In contrast, IT stocks such as TCS, Tech Mahindra, HCL Tech, and Infosys experienced declines of up to 2%, marking them as the leading laggards on the benchmark index.
The positive sentiment was widespread, with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining up to 0.6%. Sectoral indices like Nifty Financial Services, Nifty Private Bank, Nifty PSU Bank, and Nifty Auto each advanced nearly 1%, while Nifty IT fell over 1%. The overall market breadth was positive, with 1,847 advances and 565 declines on the NSE, while 96 stocks remained unchanged.
“With the uncertainties in West Asia continuing and Brent crude trading around $86, there are no positives that can lift the market higher in the near-term.”
VK Vijayakumar, Chief Investment Strategist at Geojit Investments
On the international front, the US headline consumer price index saw a 0.4% decline in June, marking its first drop since the COVID-19 pandemic, with annualised core inflation at 2.6%, below the expected 2.8%. In Asia, South Korea's Kospi surged 7%, and Japan's Nikkei rose more than 1%.
Despite the renewed optimism, caution is advised due to ongoing uncertainties in West Asia and Brent crude trading around $86, which could limit market gains in the near term. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted these concerns, noting the challenges posed by US President Donald Trump's comments and the rising CPI inflation in India.
“The 24,200 level continues to be the immediate hurdle for the Nifty 50 index.”
Rajesh Palviya, Head of Research at Axis Direct
Background
The Indian stock market has been experiencing fluctuations due to various global and domestic factors, including geopolitical tensions and economic indicators. The recent gains come amidst a backdrop of declining US inflation and strong performances in Asian markets.
Looking ahead, the immediate hurdle for the Nifty 50 index is the 24,200 level, according to Rajesh Palviya, Head of Research at Axis Direct. A sustained move above this could pave the way towards 24,350–24,500, while a breach below 24,000 could lead to further weakness. Developments around crude oil prices and the Strait of Hormuz situation will be key drivers of market direction.
