Despite the moderate sentiment in the global market, rising oil prices and uncertainty regarding US Federal Reserve decisions, Indian traders supported the upward trend on Tuesday, July 29, pushing the Indian stock market up by more than one percent during intraday trading.
Dynamics of Major Indices
The BSE Sensex barometer increased by 827 points, which is 1.07 percent in intraday trading, reaching the level of 77,593. Similarly, the NSE Nifty 50 index gained 218 points or 0.90 percent, settling at 24,203.
Market Growth Factors
The main driver of this growth was the IT sector stocks. The rise continued for the fourth consecutive day due to lower valuations and sell-offs in global technology stocks, which favorably impacts traditional Indian service companies. Furthermore, strong results from India Inc in the first quarter are improving market sentiment.
Experts warn that the sharp surge in oil prices by almost 5 percent to $87 a barrel, which occurred earlier, poses a threat to the current rally. The market will also closely watch the US Federal Reserve's decision on interest rates tonight, which is likely to influence the market's future trajectory.
Analysts' Views on Fed Impact
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that the expected Fed policy of maintaining rates is unlikely to affect the Indian market, as it has already been factored into the market. However, if the Fed suddenly raises rates, it could have slightly negative consequences for Indian markets, as rising yields in the US might prompt FIIs to shift to American bonds instead of emerging market equities.
Key Sectors and Earnings
IT stocks once again took the lead in market growth. In early trading, major index participants included Infosys, TCS, as well as HDFC Bank and Reliance Industries. The Nifty IT index traded above for the fourth session in a row on Wednesday, showing a rise of almost 3 percent during the day and 9.8 percent over four days. Investors are attracted to IT stocks due to valuation stabilization after a sharp sell-off at the beginning of the year and stable profit growth. Today, TCS, Infosys, Wipro, and HCL Tech showed gains within 2-4 percent.
Strong and better-than-expected first-quarter results for the financial year 27 in several sectors give the market more confidence in profitability forecasts and stability, despite external difficulties. Kotak Institutional Equities (KIE) forecasts sufficiently stable growth in the net profit of the Nifty50 index and its universe in the 2027 fiscal year, driven by low bases in some sectors, ongoing activity in others, and rising commodity prices.
Impact of Correction in Asia
Additionally, analysts believe that the sharp decline in chip prices in South Korea is an advantage for India, as capital may be reallocated to Nifty stocks with reasonable valuations, according to Vijayakumar. Asian markets faced strong selling pressure for the second day due to concerns over AI valuations, growing competition, and expenses. South Korea's KOSPI index fell by 5 percent, and Japan's Nikkei lost 2 percent.
Technical Market Outlook
From a technical perspective, the market bias remains constructive provided that Nifty holds above the support zone of 23,880, stated Rajesh Palviya, Head of Research at Axis Direct. He suggested that a decisive breakthrough above the resistance band of 24,100–24,150, coinciding with the 20-day moving average, could pave the way to the 24,400 level. Meanwhile, a breach below 23,880 could trigger profit booking towards 23,725.
