Indian equities staged a strong recovery on Thursday, snapping a four-day losing streak as the Sensex surged more than 1,000 points during intraday trade and the Nifty 50 crossed the 23,750 mark. The rebound was fueled by bargain buying in heavyweights like Bharti Airtel, HDFC Bank, ITC, and Reliance Industries, but the broader market remained cautious amid persistent headwinds from a weakening rupee and elevated crude oil prices.
Market Performance
By 12:35 p.m. IST, the BSE Sensex had jumped 1,007 points, or 1.35%, to 75,616.65, while the NSE Nifty 50 gained 326 points, or 1.39%, to 23,738.95. The Sensex briefly touched 75,652.52, and the Nifty climbed to 23,763.65 in intraday trading, according to Business Standard. The rally followed a nearly 4% decline in both indices over the previous four sessions, triggered by a softening rupee, rising oil costs, and sustained foreign portfolio outflows.
Rupee and Oil Pressure
The Indian rupee slipped to a record low of 95.9575 against the U.S. dollar before recovering some ground, weighed down by surging oil prices and continued foreign outflows from Indian assets. India imports nearly 90% of its crude oil and about half of its natural gas, making it highly vulnerable to global energy price swings. Brent crude traded 0.43% higher at $106.08 per barrel, while U.S. West Texas Intermediate stood at $101.43, as markets monitored U.S.-China talks for any progress on the Iran situation or potential disruptions in the Strait of Hormuz.
Sectoral Trends
IT stocks came under significant pressure, with the Nifty IT index sliding over 2%. Persistent Systems, Coforge, HCL Tech, and Tech Mahindra were among the top laggards, as per Economic Times. In contrast, pharma, banking, and heavyweight stocks led the gains. Bharti Airtel, India's second-largest telecom operator, rose sharply after reporting a jump in quarterly profit, driven by more users upgrading to pricier plans and a stable performance from its Africa operations.
Expert Views
Siddhartha Khemka, head of wealth management research at Motilal Oswal Financial Services, noted that the "final leg of the earnings season and selective policy tailwinds" provided support, but cautioned that sentiment "remains fragile due to elevated crude prices." Ajit Mishra, senior vice-president of research at Religare Broking, described the session as a "relief rebound," but expressed skepticism unless the Nifty convincingly breaks above the 24,000 mark. He suggested the rally could be mere short covering—traders unwinding bearish positions below that level.
Broader Concerns
The macro backdrop remains challenging. Prediction markets assign only a 37% probability of Strait of Hormuz traffic returning to normal before August 1, according to Kalshi, and Polymarket puts odds at just 7% for normalcy by end-May and 35% by end-June. VK Vijayakumar, chief investment strategist at Geojit Investments, warned that the rupee could hit 100 against the dollar if expensive oil persists, and noted that capital continues to flow toward stronger markets like the U.S., Japan, South Korea, and Taiwan.
While Thursday's gains offered a temporary reprieve, the rally's sustainability hinges on crude prices easing, foreign flows stabilizing, and the rupee finding a floor. Until then, the market remains on shaky ground.
