- Dalal Street saw sharp gains with Nifty rising 232 points and Sensex up 829 points early trade
- Rally driven by IT stocks and heavyweights amid India-US trade deal optimism and global cues
- Nifty IT index gained over 2%, led by Infosys, TCS, HCL Tech, and Tech Mahindra
The Dalal Street bounced back on Wednesday, with Indian equity benchmark logging sharp gains shortly after the opening bell. The Nifty 50 rose as much as 232 points, or 1.01%, to scale 23,120.9, whereas the Sensex spiked up to 829 points, or 1.12%, to hit 74,682.19 in early trade.
The strong start comes after the Dussehra holiday, as markets recovered from Monday's sharp slide. The rally seems to be driven by IT stocks and index heavyweights, supported by fresh optimism over the India-US trade deal, and strong global cues.
The benchmarks, however, have pared much of the gains from their highs. At 10:00 am, the Sensex was at 74,376.56, up 523.66 points or 0.71%, and the Nifty 50 stood at 23,017.30, up 128.35 points or 0.56%.
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The broader market is not part of the rally. At 10:02 am, the Nifty Smallcap 100 was at 18,764.55, down 1.08%, and the Nifty Midcap 100 was at 58,210.05, down 277.90 points or 0.48%. This shows that the rally is narrow, with large caps doing the heavy lifting.
Here's a look at the three factors driving the upbeat momentum.
1. India-US trade deal hopes
The market sentiment got an early boost after US President Donald Trump said that India and the US are close to signing a different kind of trade deal. Any progress on a deal would ease tariff worries for exporters and could bring foreign money back — both the factors seen as a strong support for the equity markets.
2. IT stocks lead the charge
On the sectoral front, the Nifty IT index gained more than 2% at open. Infosys, TCS, HCL Tech and Tech Mahindra were among the top gainers in the Sensex pack. The climb comes after a strong week logged by the sectoral stocks, with Nifty IT logging rising 11.4% in the five-day period ended Oct. 16, marking its best week since 2008.
3. Recovery from Monday's sell-off, helped by global cues
Markets reopened after the Dussehra holiday, and today's bounce came after Monday's sharp decline. Bargain hunting in index heavyweights is driving the recovery, with HCL Technologies (+2.06%) and ICICI Bank (+1.66%) emerging among the top gainers in early trade. Global markets are also supportive, as the Dow Jones Industrial Average and the S&P 500 ended 1.02% and 0.28% higher, respectively overnight.
What's holding the broader market back
Oil continues to remain a headwind for the Indian market. Brent crude prices rose as investors weighed Red Sea shipping risks and threats to oil infrastructure in Saudi Arabia. The December futures were quoted at $110.02, up 1.34%.
A cloud also stays over NBFC stocks, as Bajaj Finance declined 2.9% to Rs 929.2 apiece despite reporting a 23.6% year-on-year rise in net interest income for the September quarter.
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