Indian equity markets ended higher on Wednesday, led by rally in information technology and metal stocks. The benchmark BSE Sensex and Nifty 50 rose 889 points (1.16%) and 265 points (1.10%), respectively.
Mid- and small-cap stocks also gained, with their benchmark indices rising 412 points, or 0.86%, and 513 points, or 0.92%, respectively.
Siddharth Khemka, head of research – wealth management at Motilal Oswal Financial Services, attributed the positive sentiment in IT stocks to a sharp correction in global AI and semiconductor stocks. The rally in metal stocks was driven by stronger-than-expected industrial production data, supported by robust growth in manufacturing, electricity generation and capital goods output, he said.
Institutional Inflows Return
Foreign portfolio investors (FPIs) turned net buyers after four consecutive sessions of selling, purchasing equities worth Rs 2,982 crore, while domestic institutional investors remained net buyers for the fifth consecutive session, investing Rs 998 crore, according to BSE provisional data.
The Nifty India VIX fell 4.42%, signalling easing near-term volatility. Market breadth remained positive, with 2,593 stocks advancing against 1,652 decliners. Investor wealth rose by Rs 4.18 lakh crore.
Nineteen of the 25 sectoral indices ended in positive territory, led by IT and metal stocks, along with telecom and FMCG shares. Services, realty, power, oil & gas and auto stocks were among the biggest laggards.
Hindustan Unilever, Infosys, Trent, Larsen & Toubro and Tata Steel were the top gainers, while Adani Ports, Mahindra & Mahindra, PowerGrid, Bharat Electronics and NTPC were among the biggest losers.
Vinod Nair, head of research at Geojit Investments, said India’s diversified market structure strengthens the case for FII inflows as crowded AI trades unwind. Stronger-than-expected industrial production data provided the initial catalyst, while renewed risk appetite helped sustain gains through the session, he said.
Khemka said market participants looked past recent geopolitical tensions and crude oil volatility, shifting their focus back to domestic earnings and macroeconomic triggers.
US Fed Decision in Focus
Going ahead, both Khemka and Nair identified the upcoming US Federal Reserve policy decision and its commentary as key events for market participants, with a pause in interest rates widely expected.
“The widely expected pause in rates is unlikely to materially impact Indian markets, as it is mostly already priced in,” Nair said.
From a technical perspective, Sachin Gupta, VP – technical research at Choice Equity Broking, said the broader market structure is likely to remain favourable as long as key support zones hold. He recommended continuing with a buy-on-dips approach.