Indian Markets Ride a Rollercoaster: Sensex & Nifty Stage Comeback Amid Expiry Swings; IT Sector Faces a Turbulent Day

The Indian stock markets witnessed a dramatic session, with benchmark indices Sensex and Nifty staging a resilient comeback from their day's lowest points, albeit still concluding Thursday's trade in the red. This remarkable recovery unfolded amidst the characteristic volatility of the monthly expiry, keeping investors on the edge of their seats.

Despite the broader market's attempt to pare losses, the Information Technology (IT) sector emerged as the primary drag, signaling underlying concerns within the tech giants.

By the closing bell, the Nifty 50 had dipped by 0.35 percent, settling at 23,667.60, while the Sensex registered a decline of 0.28 percent, closing at 77,209.90.

This partial rebound from their respective lows of 23,556.70 and 76,897.60 showcased a market battling significant headwinds, primarily from the technology space. The Nifty IT index, a barometer for the sector's health, slumped by nearly 2 percent, underscoring the pressure faced by India's tech behemoths.

A closer look at the market movers reveals that prominent IT names bore the brunt of the selling pressure.

Companies like TCS, Infosys, Wipro, LTIMindtree, and HCL Technologies were among the top laggards on the Nifty 50, their stock prices sliding significantly and pulling the broader index down. This sector-specific weakness contrasted with some support from other heavyweights. Nifty Bank, Financial Services, Auto, and Oil & Gas indices showed relative resilience, helping to cushion the overall market's fall.

Key contributors to the market's attempt at recovery included a select group of large-cap stocks.

Reliance Industries, HDFC Bank, ICICI Bank, and Larsen & Toubro notably managed to post gains, providing crucial support when other sectors faltered. Their positive momentum helped prevent a steeper decline for the benchmark indices, highlighting the diversified nature of the Indian market's drivers.

Interestingly, the broader market indices painted a slightly more optimistic picture than their large-cap counterparts.

The Nifty Midcap 100 closed 0.6 percent higher, while the Nifty Smallcap 100 gained 0.3 percent. This divergence suggests that while large-cap IT stocks faced selling pressure, there was sustained buying interest and strength in the mid and small-cap segments, indicating a robust underlying market breadth.

The advance-decline ratio was positive, with 1,223 stocks advancing against 1,023 declining, further confirming this underlying strength.

From an institutional perspective, Foreign Institutional Investors (FIIs) remained net sellers, offloading shares worth Rs 1,847.00 crore. In contrast, Domestic Institutional Investors (DIIs) provided crucial support by injecting Rs 2,525.26 crore into the market, absorbing some of the FII selling pressure and contributing to the day's recovery from lows.

This DII buying has been a consistent factor in providing stability to the Indian markets.

Market analysts offered a cautious but hopeful outlook. Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty found support near the 23,500 level, bouncing back after hitting the 21-day Exponential Moving Average (EMA).

He suggested that a sustained move above 23,700 could pave the way for a rally towards 24,000, while 23,500 would act as a critical support level on the downside. The ongoing expiry-related adjustments and global cues will continue to dictate market movements in the immediate term.