Sensex gains over 550 points: What's behind today's rally?
What's the story
India's benchmark indices, the Sensex and Nifty, have bounced back from their earlier losses to trade in the green on October 30. The recovery is due to various reasons, including buying in IT shares. At around noon, the Sensex was trading at 74,706.37 after gaining over 555.33 points or nearly 0.75%. The Nifty also witnessed a similar upward trend, trading at 23,103.35 after gaining 166.6 points or nearly 0.73%.
Market dynamics
IT index jumps 1.7%
The IT index jumped 1.7% as global AI-linked stocks in Asia witnessed a dip over concerns that rising AI spending may not yield enough returns.
Analysts see Indian IT companies as defensive beneficiaries during such sell-offs, with businesses preferring cost-cutting and outsourcing to expensive in-house AI investments.
The positive sentiment was further fueled by Cognizant's stable results for the quarter ending September, which were largely in line with market expectations.
Market resilience
Factors contributing to market's upward trend
The recent gains in the Nifty and Sensex, which are up 1.6% and 2.5%, respectively, in October, are also supported by value buying after strong quarterly results from key constituents.
Further, the US Federal Reserve's decision to hold interest rates steady has added to the positive sentiment.
Vinod Nair, head of research at Geojit Investments, said, "markets remain supported by selective earnings resilience and domestic demand stability."