Indian benchmark indices staged a modest recovery on Thursday, breaking a three-session losing run despite a highly volatile expiry-day trade. The Sensex swung almost 1,000 points during the final minutes of the closing auction before settling in positive territory, while the Nifty finished above the 23,450 mark.
The Sensex climbed 138.36 points, or 0.19%, to close at 74,902.59. The Nifty 50 advanced 46.30 points, or 0.20%, ending at 23,477.80.
The Nifty began the session at 23,446.60 and traded between an intraday peak of 23,494.95 and a low of 23,380.10.
Sensex Sees Sharp Swing During Closing Auction
Thursday’s session remained volatile, particularly toward the close. On the weekly expiry day, the Sensex moved nearly 1,000 points within the final few minutes during the closing auction, highlighting the sharp swings in investor sentiment.
The recovery followed a steep decline in the previous trading session. Investors continued to monitor elevated crude oil prices and uncertain global market signals, particularly as geopolitical tensions in the Middle East remained a concern.
Brent crude continued to trade above $100 per barrel, raising worries about potential disruptions to energy supplies and the possibility of renewed inflationary pressure.
Banking Stocks Provide Support
Financial stocks played an important role in helping the benchmarks finish higher.
The Nifty Bank index gained 0.31%, while the Nifty Financial Services index rose 0.57%. The Nifty Private Bank index advanced 0.34%, and the PSU Bank index added 0.40%.
Among individual Sensex constituents, Power Grid emerged as the biggest gainer, rising 2.27%. Axis Bank, UltraTech Cement, NTPC, Tech Mahindra and Bharti Airtel were among the other prominent stocks that finished higher.
HDFC Bank, Larsen & Toubro, Kotak Mahindra Bank and Bajaj Finance also contributed to the market’s positive close.
HCLTech Leads Declines
The technology sector remained under pressure, with HCLTech falling 2.43%, making it the biggest decliner among major stocks.
Tata Steel, Trent, ITC, Bharat Electronics and Adani Ports also ended lower. Other notable laggards included M&M, Asian Paints, Bajaj Finserv, Sun Pharma and Infosys.
Broader Market Performance Remains Mixed
The gains in the headline indices did not translate into a broad-based market rally.
The Nifty Midcap 100 slipped 0.37%, while the Nifty Midcap 50 declined 0.36%. The Nifty Smallcap 100 also edged down 0.06%.
The Nifty Smallcap 250, however, managed to finish marginally higher, gaining 0.03%.
IT, Metal and Pharma Stocks Under Pressure
Sectoral indices delivered a mixed performance during the session.
Nifty Media was among the better performers, gaining 0.53%. PSU Banks, Private Banks and Financial Services ex-Bank indices also closed with gains.
On the weaker side, the Nifty MidSmall IT & Telecom index fell 0.74%. Nifty Metal declined 0.67%, while Pharma dropped 0.50% and Auto lost 0.41%.
The India VIX declined 1.78% to 11.71, indicating some moderation in expectations of near-term market volatility.
Crude Oil, Inflation and Global Cues Remain Key Risks
Vinod Nair, Head of Research at Geojit Investments, said the prospect of coordinated monetary tightening has increased as higher crude prices and prolonged geopolitical tensions have strengthened concerns around energy-driven inflation.
According to Nair, investors are now closely watching upcoming US inflation data for indications about the future direction of interest rates.
He also pointed to rising global bond yields as a potential source of pressure on emerging-market capital flows. Expectations of a Bank of Japan rate hike and a stronger yen have also raised concerns about a possible unwinding of the yen carry trade.
Nair said the Indian market experienced a volatile expiry-day session as weak Asian market signals and fluctuations in crude prices kept investors cautious.
At the same time, strong equity fund inflows recorded in August and an improvement in the SIP stoppage ratio offered some support to sentiment. However, the weakening rupee and rising domestic bond yields continued to weigh on the broader market outlook.
What Lies Ahead for Indian Markets?
The Thursday recovery offered some relief after three consecutive sessions of losses, but market sentiment remains sensitive to global developments.
Investors are likely to track crude oil prices, US inflation data, bond yields, currency movements and developments in the Middle East for further direction. With geopolitical uncertainty still elevated, volatility could remain a key feature of the Indian equity market in the near term.