Indian equity benchmarks posted gains for the second consecutive session on Tuesday, buoyed by positive momentum in information technology, consumer goods, and financial stocks, despite headwinds from the energy and metal sectors. The Nifty 50 index closed at 25,725.40, a gain of 42.65 points, or 0.17%, while the BSE Sensex finished at 83,450.96, up 173.81 points, or 0.21%.
The gains follow a period of volatility for Indian markets. On February 12, both the Sensex and Nifty experienced declines, with the Sensex shedding 559 points, or 0.66%, to close at 83,674.92, and the Nifty 50 settling at 25,807.20, down 147 points, or 0.57%. The February 12 downturn was attributed to a sell-off in information technology stocks, influenced by signals from overseas markets.
Earlier in February, on February 3, the BSE Sensex had surged 2,073 points to reach 83,875, and the Nifty climbed to 25,728 following the finalization of a trade agreement between India and the United States. The agreement included a reduction in reciprocal tariffs on Indian goods to 18% from 25%, a move that investors welcomed.
Recent market performance has been sensitive to global economic data. A stronger-than-expected US jobs report, indicating the addition of 130,000 jobs in January and a drop in unemployment to 4.3%, has dampened expectations of imminent interest rate cuts by the Federal Reserve. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that this development suggests the rate-cutting cycle may be over in India as well, given the country’s current growth and anticipated inflation trends.
On February 16, the Sensex jumped 650 points, closing at 83,450.96, while the Nifty ended at 25,682. The Nifty MidCap and Nifty SmallCap indices also saw gains, rising 0.48% and 0.11% respectively.
The market’s reaction to IT stocks has been particularly pronounced. Tech Mahindra, Infosys, and Wipro were among the top losers in the Nifty50 basket on February 12, with declines reaching as much as 5%. The Nifty IT index slumped over 4%, becoming the worst-performing sectoral index of the day. Concerns about the potential disruption of traditional outsourcing models due to artificial intelligence-driven automation have contributed to the weakness in the technology sector.
On February 13, the BSE Sensex tumbled over 900 points, with the Nifty 50 slipping below the 25,550 level, resulting in an estimated Rs 4 lakh crore loss for D-St investors.