Stock market today: The Indian stock market witnessed solid buying interest on Wednesday, 24 June, with frontline equity indices, the Sensex and the Nifty 50, clocking strong gains.
The Sensex ended 791 points, or 1.04%, higher at 76,991.22, while the Nifty 50 settled at 24,021.65, up 198 points, or 0.83%. Mid and small-cap segments underperformed, as the Nifty Midcap 100 and Smallcap 100 indices rose by 0.10% and 0.39%, respectively.
The overall market capitalisation of firms listed on the BSE rose to over ₹476 lakh crore from ₹475 lakh crore in the previous session, making investors richer by over ₹1 lakh crore in a day.
Why did the Indian stock market rise?
Let’s take a look at key factors behind the rise in the domestic market:
1. Short covering in select heavyweights
The rise in benchmarks can be attributed to short covering in select heavyweights, particularly in the banking, financial, and IT sectors.
The Nifty IT index jumped over 2%, while Bank Nifty, Private Bank, and Financial Services indices jumped over 1.5% each.
Stocks such as ICICI Bank, HDFC Bank, Infosys, Bajaj Finance, and SBI were among the top contributors to the benchmarks’ gains today.
IT stocks are rising on the back of a stronger dollar and expectations that Indian IT companies will further strengthen their AI capabilities.
Banking and financial stocks are rising as their credit growth has been strong and is expected to remain so in the coming quarters, making the sector attractive for medium-term bets.
“The banking sector continues to benefit from healthy credit growth. While deposit mobilisation remains a challenge for banks, the Reserve Bank of India (RBI) has provided some relief by easing access to funds through avenues such as foreign currency non-resident (FCNR) deposits and external commercial borrowings (ECBs). As a result, concerns around funding have eased somewhat, while loan growth remains robust,” said Pankaj Pandey, the head of research at ICICI Securities.
“IT valuations have become more attractive after the correction, which explains the renewed interest from some investors. However, earnings growth remains a key challenge, and the sector continues to face uncertainty about the long-term impact of AI on traditional IT services,” said Pandey.
Earlier, several mid-tier IT companies suggested that the near-term business disruption caused by AI could eventually be offset by new opportunities emerging from AI adoption, particularly from FY28 onwards.
More recently, larger companies such as Infosys have also echoed a similar view. This has provided some comfort to investors that, while AI may create short-term challenges, it could also open up significant growth opportunities in the longer run, Pandey underscored.
2. Anti-AI trade could be at play
Some experts believe the domestic market is also benefiting from anti-AI trade. The sharp rise in AI stocks over the last year has raised concerns that the sector may be in a bubble or approaching one. This is prompting investors to shift focus to other markets which offer opportunities beyond AI.
“This excessive volatility in semiconductor stocks and markets like South Korea and Taiwan is favourable to India, which is growing at a steady pace. The crash in Brent crude to below $77 has removed the macro headwinds for India. The rupee has stabilised. FII selling appears to have tapered off. This is positive for the market,” Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
3. Crude oil prices fall further
Crude oil benchmark Brent Crude is now near the $75 per barrel mark, offering a huge relief to major importers like India.
A decline in oil prices is a major positive for the Indian economy. As a result, the Indian trade deficit is expected to remain under control, inflation may not shoot up, and economic growth will not lose momentum.
Oil prices have crashed after the US and Iran made progress in their peace negotiations, and Iran loosened its grip on the Strait of Hormuz.
4. Reports about a potential India-US trade deal
Positive reports surrounding a potential India-US trade deal also influenced market sentiment.
As per news agency PTI, a senior US official stated that the US and India are very close to concluding a bilateral trade deal that will open the Indian market to American goods on reciprocal and mutually beneficial terms.
5. FPI selling tapers off
The intensity of selling by foreign portfolio investors (FPIs) in Indian equities has decreased. In fact, FPIs were sporadic buyers of Indian equities in June, aided by stability in the rupee and, to some extent, a rotation away from AI-driven trades.
FPIs bought equities worth ₹17.86 crore on Tuesday, according to exchange data.
Nifty 50 technical outlook
According to Sudeep Shah, the head of technical and derivatives research at SBI Securities, the immediate resistance for Nifty is placed in the 24,140-24,170 zone, which coincides with the 100-day EMA.
“Any sustainable move above this zone could result in Nifty extending its pullback towards 24,300, followed by 24,450 in the short term. On the downside, the immediate support for Nifty is placed in the 23,900-23,870 zone,” said Shah.
Rupak De, Senior Technical Analyst at LKP Securities, noted that the index found support at the 20 EMA over the last two trading sessions before moving higher. The hourly RSI remains in a positive crossover, indicating that the underlying strength is intact. Additionally, the Nifty has reclaimed both the 20- and 50-EMAs on the hourly timeframe, further improving the short-term outlook.
De further added that the meaningful recovery from the 20EMA on the daily chart suggests strong buying interest at lower levels, indicating that buyers continue to remain active.
“On the daily timeframe, the Nifty has formed a Piercing Line candlestick pattern near the 20EMA support zone, signalling the possibility of a strong rally in the short term. On the higher end, resistance is seen at 24,500 and 24,800. On the lower end, 23,800 is likely to continue acting as a crucial support level,” said De.
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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