Indian equity markets staged a strong recovery on Tuesday, with the Sensex climbing more than 1,100 points by the close and investors' wealth increasing by nearly ₹4 trillion. The rally was led by information technology stocks, while a stronger rupee and easing crude oil prices also supported market sentiment.
The gains came after both benchmark indices opened on a subdued note. The Sensex and Nifty initially fell around 30 points each at the start of trading before reversing course and advancing through the session.
IT stocks drive market recovery
Information technology shares led the market's rebound, with Tata Consultancy Services (TCS) and HCL Technologies among the major gainers following their latest quarterly earnings announcements. Tech Mahindra and Infosys also advanced, lifting the Nifty IT index.
Buying interest extended to several other sectors, including banking, financial services, automobiles, fast-moving consumer goods and metals, contributing to the broader market's recovery.
The rally followed a weak session on Monday, when the Sensex fell 547.65 points, or 0.76%, to close at 71,924.68, while the Nifty declined 157.10 points, or 0.70%, to settle at 22,363.35.
Rupee opens higher against US dollar
The Indian rupee opened stronger on Tuesday, gaining 62 paise to trade at 95.16 against the US dollar, compared with its previous close of 95.78.
The currency's recovery followed measures by the Reserve Bank of India to support the rupee and curb excessive demand for dollars. The improvement in the domestic currency added to the positive sentiment in equity markets.
Crude oil and global cues remain in focus
Investors also tracked international crude oil prices and developments in global markets. A decline in oil prices helped ease some concerns over India's import bill and the potential impact of expensive energy on inflation.
However, foreign investor outflows and persistent concerns over inflation continued to weigh on sentiment. Foreign institutional investors sold Indian equities worth ₹1,708.48 crore on Monday, even as domestic institutional investors provided support to the market.
The sharp rebound on Tuesday helped restore some of the losses recorded in the previous session, with gains in technology shares and broader buying interest driving the benchmarks higher.