Falling Oil Prices Lift Investor Sentiment

Our Business Correspondent

Domestic equity markets extended their upward momentum for the second consecutive trading session on Thursday, with benchmark indices closing firmly higher amid strong buying in information technology (IT), automobile and select banking stocks. Softer global crude oil prices, optimism surrounding ongoing US-Iran diplomatic engagement and renewed investor interest in beaten-down technology shares helped improve overall market sentiment.

The BSE Sensex gained 579.48 points (0.75%) to close at 77,502.12, while the Nifty 50 advanced 169.85 points (0.71%) to settle at 24,175.70, comfortably above the psychologically important 24,150 mark. Over the past two trading sessions, the Sensex has climbed 1.33%, while the Nifty has gained 1.29%, indicating sustained buying across sectors after recent market volatility.

IT Stocks Stage Strong Comeback

Technology stocks emerged as the biggest contributors to Thursday’s rally after witnessing heavy selling over the previous four sessions. Investors returned to fundamentally strong IT companies, taking advantage of lower valuations amid expectations that global demand for digital services will remain resilient.

The Nifty IT Index surged 4.64%, snapping a four-day losing streak during which it had fallen more than 6.5%.

Among the major gainers, Infosys rallied 5.82%, Tata Consultancy Services (TCS) advanced 4.45%, Persistent Systems climbed 5.93%, Mphasis gained 5.68%, while Coforge, Tech Mahindra, HCLTech, LTIMindtree, Wipro and Oracle Financial Services Software also posted strong gains.

Market participants attributed the sharp rebound to bargain buying after the recent correction as well as easing concerns over global technology spending.

Broader Markets Outperform

The rally was not confined to frontline stocks. Broader markets also witnessed healthy participation, reflecting improving investor confidence.

The BSE MidCap Index rose 0.65%, while the BSE SmallCap Index outperformed with a gain of 0.98%, indicating strong interest in emerging growth companies.

Market breadth remained positive throughout the session. On the Bombay Stock Exchange, 2,536 stocks advanced, 1,740 declined, while 191 shares remained unchanged, highlighting widespread buying across sectors.

The India VIX, widely regarded as the market’s fear gauge, declined 7.21% to 12.29, suggesting investors expect relatively lower volatility in the near term.

Lower Oil Prices Boost Market Mood

Investor sentiment also improved after international crude oil prices declined amid reports of continuing diplomatic engagement between the United States and Iran, easing fears of supply disruptions in global energy markets.

Brent crude futures for September delivery fell 1.48% to $70.51 per barrel, offering relief to energy-importing countries like India. Lower crude prices are generally viewed as positive for the Indian economy as they help moderate inflation, reduce import costs and improve the country’s current account balance.

Fiscal Deficit Widens in Early FY27

Meanwhile, the latest government finance data showed that India’s fiscal deficit reached Rs 1.62 lakh crore during the first two months of FY27, accounting for 9.6% of the full-year budget estimate, compared with just 0.8% during the corresponding period last year.

According to official figures, total government receipts stood at Rs 7.19 lakh crore, while expenditure reached Rs 8.81 lakh crore. Revenue receipts amounted to Rs 6.99 lakh crore, comprising Rs 3.48 lakh crore in tax collections and Rs 3.51 lakh crore in non-tax revenue.

Although early fiscal deficit numbers often fluctuate because of seasonal expenditure patterns, analysts will closely monitor revenue mobilisation and spending trends over the coming months.

Bond, Currency and Commodity Markets

In the debt market, India’s benchmark 10-year government bond yield eased to 6.721% from the previous close of 6.760%, indicating improved demand for government securities.

The Indian rupee, however, weakened marginally against the US dollar, trading around 95.3950 compared with the previous close of 95.1650.

Gold prices remained largely stable, with MCX August gold futures edging up 0.04% to Rs 1,44,488 per 10 grams.

The US Dollar Index, which measures the greenback against a basket of major currencies, declined 0.33% to 101.10, while the yield on the US 10-year Treasury rose to 4.494%.

Global Markets Mixed Ahead of US Jobs Data

Global markets remained cautious as investors awaited the closely watched US non-farm payrolls report, expected later this week, which could provide important clues about the future direction of US interest rates.

European markets traded higher despite cautious commentary from major central banks, while most Asian markets also ended in positive territory.

However, South Korea’s Kospi Index plunged 7.36%, triggering an automatic five-minute trading halt after breaching the Korea Exchange’s circuit-breaker threshold amid heightened market volatility.

On Wall Street overnight, trading remained mixed. The Dow Jones Industrial Average briefly touched a record high before ending marginally lower. The S&P 500 declined 0.22%, while the technology-heavy Nasdaq Composite fell 0.66% as investors booked profits in semiconductor stocks following their strong gains during the first half of 2026.

Auto Sales Support Sector Performance

Automobile stocks remained active following the release of monthly sales data for June.

TVS Motor Company gained 3.72% after reporting a robust 47% increase in total sales to 590,003 units.

Force Motors surged 5.66% after announcing a 23.5% rise in monthly sales.

Bajaj Auto remained largely unchanged despite posting 28% growth in total vehicle sales.

Maruti Suzuki India slipped 0.46% even after reporting a healthy 19.3% increase in June sales to 200,390 units, suggesting investors had already priced in the strong performance.

Banking Stocks Deliver Mixed Performance

The banking sector presented a mixed picture.

ICICI Bank contributed positively to benchmark indices with a gain of 1.54%.

Among public sector banks, Bank of India advanced 2.65% after reporting a 16.58% increase in global business, while Punjab & Sind Bank, Dhanlaxmi Bank, Capital Small Finance Bank and Tamilnad Mercantile Bank also reported healthy business growth.

However, Bank of Baroda declined 4.34% after announcing an out-of-court settlement related to the long-running litigation involving UAE-based NMC Health. Under the agreement, the bank’s Abu Dhabi branch will pay $600 million without admitting any liability, bringing closure to the prolonged legal dispute.

Corporate Developments

Mining major NMDC rose after reporting a 44.3% increase in iron ore production during June.

Coal India gained after securing a Rs 2,831 crore contract to establish a 600 MW solar power project in Uttar Pradesh.

Crompton Greaves Consumer Electricals advanced following a Rs 29.77 crore order for solar-powered water pumping systems from Maharashtra State Electricity Distribution Company.

Renewable energy continued to attract investor attention, with GK Energy rising after winning a Rs 48.02 crore rooftop solar project, while United Drilling Tools gained after securing a repeat order from Vedanta.

Fashion retailer Baazar Style Retail hit the upper circuit after reporting a 29% increase in quarterly revenue and healthy same-store sales growth.

IPO Market Remains Active

Primary market activity also remained strong.

The Knack Packaging initial public offering received bids for over 13.5 crore shares against 1.89 crore shares on offer, translating into 7.13 times subscription by Thursday evening. The public issue closes on 3 July.

Meanwhile, newly listed CSM Technologies debuted at its issue price of Rs 113 before slipping nearly 5% during trading to close around Rs 107.35, reflecting cautious investor sentiment toward the stock despite stable broader market conditions.

Outlook

Market analysts believe investor focus will now shift toward key global economic indicators, particularly the upcoming US employment report, developments in crude oil prices and domestic corporate earnings for the April-June quarter.

While easing geopolitical concerns and declining oil prices have improved near-term sentiment, sustained market gains will depend on corporate profitability, global interest rate expectations and continued foreign investment flows. With volatility easing and broader participation improving, investors remain cautiously optimistic about the market’s near-term trajectory.

Disclaimer: This report is intended for informational and journalistic purposes only and should not be construed as investment advice, a recommendation to buy or sell securities, or a forecast of future market performance. Investors should consult certified financial advisers before making investment decisions.