Rs 5 lakh crore wealth boost! Top 5 factors fuelling today's 800-point Sensex rally

The Indian stock market traded with strong gains on Friday, with the Sensex and Nifty rising over 1% each as in-line earnings from IT heavyweight TCS, positive global cues and other factors boosted investor sentiment.

The Sensex jumped 800 points to 77,527, while the Nifty 50 advanced over 230 points to 24,197, extending gains for the second consecutive session. Meanwhile, India VIX, which measures market volatility, fell another 9% to 12.71.
The rally added nearly Rs 5 lakh crore to the combined market capitalisation of all BSE-listed companies, taking it to nearly Rs 481 lakh crore.


Infosys, TCS, Tech Mahindra and HCL Tech were the top Sensex gainers, rising 3-4%. IndiGo, Asian Paints, ICICI Bank, UltraTech Cement, Tata Steel, M&M and SBI also gained more than 1% each. Bucking the trend, Sun Pharma fell around 1%.

Broader markets also advanced, with the Nifty Smallcap 100 and Nifty Midcap 100 indices gaining up to 0.7% each. Among sectors, the Nifty IT index surged more than 3% to lead the rally, followed by the Nifty Metal index, which rose over 1%. The Nifty Pharma index, however, slipped around 1%. Market breadth remained strong, with 2,010 advances, 429 declines and 97 unchanged stocks on the NSE.

Here are the key factors boosting market sentiment today:

1) TCS kicks off Q1 earnings season on a strong note

The rally was led by IT stocks after Tata Consultancy Services (TCS) reported a 5% year-on-year rise in Q1FY27 consolidated net profit to Rs 13,349 crore. Revenue from operations grew 14% YoY to Rs 72,275 crore, while total contract value (TCV) stood at $9.5 billion, boosting sentiment across the IT sector.

TCS earnings were more or less in line with estimates, with brokerages like Nuvama, Motilal Oswal Financial Services and others maintaining their ‘Buy’ rating and seeing up to 46% upside potential.

2) Positive global cues

The optimism on Dalal Street comes amid positive global cues. Asian markets recorded strong gains on Friday morning, with South Korea’s Kospi jumping around 5% to exit the bear market. Japan’s Nikkei and Hong Kong’s Hang Seng jumped around 2% each. China’s Shanghai Composite, meanwhile, gained nearly 1%.

Wall Street also recorded sharp gains on Thursday, with the tech-heavy Nasdaq gaining more than 1% amid a sharp rebound in tech stocks. In Europe, France’s CAC and Germany’s DAX gained around 1% each, but the UK’s FTSE slipped into the red.

3) Market shrugs off escalating Iran-US tensions

Iranian armed forces launched attacks on US military infrastructure in Gulf states on Thursday, following US strikes on Iran's southern coastal and eastern provinces. Separately, Iranian media reported multiple explosions in southern Iran, including in Bushehr, home to one of the country's nuclear power plants.

The latest escalation in the Iran-US conflict has renewed concerns over a potential disruption to the Strait of Hormuz, a key shipping route through which about 20% of the world's oil and gas supplies pass. Despite the heightened geopolitical tensions, global equity markets have remained resilient.

“Tensions in West Asia continue without any clarity of a resolution to the geopolitical crisis. However, interestingly, markets are largely ignoring these negative developments. This confident message from the market is significant. But investors have to be cautious, warranting monitoring of the developments,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

4) Oil prices rise

Oil prices inched slightly higher today, but have sharply declined after nearing $80 per barrel earlier during the week following US President Donald Trump’s statement that the ceasefire between US and Iran was “over”. Brent crude futures were trading at around $76 per barrel and WTI Crude futures were trading near $72 per barrel on Friday morning.

Oil prices continue to remain significantly below the levels seen during the raging war earlier this year, when Brent crude prices had soared above $120 per barrel.

5) FII buying trend

Foreign investors remained net sellers of Indian equities on Thursday, net selling shares worth around Rs 533 crore, according to provisional data available on NSE. However, the overall trend shows FIIs turning bullish on Indian equities. They bought Indian shares worth more than Rs 8,280 crore during a six session streak between July 1 and July 8.

What lies ahead?
From the domestic perspective, there are no major headwinds for the economy now, according to VK Vijayakumar from Geojit Investments. He added that stock markets will reflect this economic resilience and will respond positively to positive news from sectors and companies.

“Broadly, financials and automobiles will remain strong anticipating good Q1 numbers. Select pharmaceuticals and digital platform companies are exhibiting strength, indicating good Q1 numbers. In these segments there are buy on dips opportunities,” the analyst said.

Technical view on Nifty
Anand James, Chief Market Strategist at Geojit Investments, noted that the recovery swing unfolded yesterday on anticipated lines, after which investors can now look at an upswing till 24,200-24,229 or position for resumption of Wednesday’s declines.

“Upside plays can have downside marker at 24,040, but downside attempts, if any, are not expected to gain momentum, with 23,936-23,800 region appearing firm enough for now,” according to James.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)