Our Business Correspondent

Indian equity markets staged a strong recovery on Thursday, bringing much-needed relief to investors after a prolonged period of losses. The benchmark Nifty 50 broke its seven-session losing streak and climbed back above the psychologically important 24,200 mark, while the BSE Sensex surged more than 600 points as easing global bond-market pressures improved risk appetite.

The rebound was supported largely by a softer tone in US government bond yields following the US Treasury’s announcement that it planned to increase buyback operations for longer-duration government debt. The move helped ease concerns surrounding the recent rise in global bond yields and encouraged investors to return to riskier assets, including equities. Reuters reported that the recovery was particularly visible in IT and financial stocks, with most major sectors participating in the rebound.

At the close, the S&P BSE Sensex jumped 628.04 points, or 0.82%, to 77,537.72, while the Nifty 50 advanced 153.55 points, or 0.64%, to 24,231.85. The gains marked a reversal of the recent trend in which the Sensex had declined for four consecutive sessions and the Nifty had fallen for seven straight sessions.

The recovery, however, needs to be viewed against the backdrop of the recent correction. Over the previous four trading sessions, the Sensex had lost 1.49%, while the Nifty had declined 2.05% over seven consecutive sessions. Thursday’s gains therefore represented a significant technical rebound, but investors are likely to watch closely whether the indices can sustain the momentum in subsequent sessions.

Global Bond Markets Provide Relief

The principal trigger for the day’s improvement was the change in sentiment in global bond markets.

The US Treasury’s decision to increase buybacks of longer-duration government securities helped reduce pressure on the long-end of the US Treasury curve. The move was particularly important because rising US bond yields had recently emerged as a major concern for global equity investors.

Asian markets responded positively to the development, tracking the recovery on Wall Street. The 30-year US Treasury yield, which had recently climbed to 5.337%, its highest level since 2007, eased after the Treasury announcement. Lower longer-term yields generally improve the relative attractiveness of equities by reducing the pressure on valuation multiples and easing financial conditions.

Wall Street had also provided a positive lead. The S&P 500 snapped a three-session losing streak on Wednesday, while the Dow Jones Industrial Average and Nasdaq Composite ended higher by around 0.2%. The recovery was aided by a decline in longer-dated Treasury yields.

The improvement in bond-market sentiment consequently filtered into Indian equities, particularly rate-sensitive and growth-oriented sectors.

IT, Financials Lead Recovery

Buying was broad-based across the domestic market, with IT, financial services, real estate and media stocks among the major beneficiaries.

Large-cap financial stocks provided important support to the Nifty. Bharti Airtel gained 1.02%, ICICI Bank rose 0.71% and HDFC Bank advanced 0.70%, making them among the key contributors to the benchmark’s recovery.

IT stocks also benefited from the improvement in global risk sentiment. The sector remains particularly sensitive to movements in US bond yields because higher yields can weigh on valuations of growth-oriented companies.

Financial stocks, meanwhile, benefited from renewed buying interest as concerns over global financial conditions eased. Gold-loan financiers also attracted attention, with investors continuing to look for opportunities in secured lending businesses.

Despite the strength in frontline stocks, the broader market did not fully participate in the rally. The BSE 150 MidCap Index declined 0.53%, while the BSE 250 SmallCap Index fell 0.48%.

Market breadth on the BSE was nevertheless positive, with 2,450 shares advancing against 1,874 declines, while 237 stocks remained unchanged. The mixed performance between large caps and broader-market stocks indicates that investors remained selective despite the benchmark recovery.

Nifty Faces Resistance Near 24,300

From a technical perspective, the Nifty’s close above 24,200 is encouraging, but analysts are likely to monitor the 24,290-24,320 zone closely.

A decisive move above this resistance area could strengthen the recovery and potentially signal that the recent correction is losing momentum. On the downside, the 24,130-24,100 region remains an important immediate support zone.

The index’s ability to remain above this support area will be crucial for maintaining the short-term recovery. A sustained move above 24,320, accompanied by stronger participation from mid- and small-cap stocks, could improve market sentiment further.

However, after seven consecutive sessions of losses, a rebound of this nature can also encourage short covering. Investors would therefore need to distinguish between a technical recovery and a durable change in the underlying trend.

Oil Prices Remain a Major Concern

While falling bond-market pressure provided support, crude oil remained a major source of uncertainty.

Brent crude for October 2026 settlement rose $2.40, or 2.62%, to $94.02 a barrel. Oil prices remained elevated amid continuing uncertainty surrounding the US-Iran conflict and concerns over possible disruptions to shipping through the Persian Gulf.

For India, persistently high crude prices remain a significant risk because the country is heavily dependent on imported oil. A sustained rise in crude prices can put pressure on the trade deficit, inflation, the rupee and corporate margins.

The combination of high crude prices and elevated US yields therefore continues to present a challenging external environment for Indian markets.

Rupee Ends Three-Day Losing Streak

The Indian rupee also provided some relief by snapping its three-session losing streak.

The partially convertible rupee was hovering around 95.7150 against the US dollar, compared with the previous close of 95.7350. The currency therefore remained close to its recent weak levels despite the marginal improvement.

The dollar index also eased, declining 0.21% to 98.63, which helped reduce some pressure on emerging-market currencies.

However, the rupee continues to face multiple headwinds, including high crude prices, global capital flows and the strength of the US currency. A sustained improvement in global risk sentiment could provide some support, but oil prices remain a key variable.

Bond Yields and Gold

India’s domestic bond market remained relatively firm despite the improvement in equities. The yield on the benchmark 10-year government security rose to 6.862%, compared with 6.812% in the previous session.

The rise in domestic bond yields indicates that the improvement in global sentiment has not completely eliminated concerns surrounding interest rates and inflation.

Gold prices, meanwhile, remained largely steady. MCX Gold futures for October 5, 2026 settlement rose 0.10% to Rs 1,58,151, reflecting continued demand for the precious metal amid geopolitical and macroeconomic uncertainty.

Gold continues to attract investors as a hedge against inflation, currency volatility and geopolitical risks.

European Markets Remain Cautious

European equities traded lower on Thursday as investors remained concerned about inflation and elevated energy prices.

The rise in crude oil prices, combined with a relatively hawkish outlook from the US Federal Reserve, kept investors cautious despite the improvement in global bond markets.

Minutes of the Federal Reserve’s July meeting showed that several policymakers remained open to further interest-rate increases if inflation stayed elevated. The US central bank had kept its policy rate unchanged at 3.50%-3.75%.

The prospect of higher US rates remains a key concern for emerging markets because it can encourage capital to move towards dollar-denominated assets and put pressure on currencies such as the rupee.

Investors were also awaiting US weekly jobless claims for further clues about labour-market conditions and the future path of monetary policy.

Sugar Stocks Rally on Inventory Restrictions

Sugar stocks emerged among the biggest gainers after the government tightened inventory limits for bulk sugar consumers ahead of the festive season.

Under the new directive, bulk consumers using more than 10 metric tonnes of sugar a month will have to limit their inventories to 15 days from September 1 to November 30, 2026. The measure covers confectionery manufacturers, beverage companies, food processors and other institutional buyers.

The move triggered strong buying interest in sugar companies on expectations that tighter inventory management could influence procurement patterns and market prices.

Balrampur Chini Mills surged 19.55%, Bannari Amman Sugars gained 17.23%, Bajaj Hindusthan Sugar advanced 14.47% and Uttam Sugar climbed 11.70%. Avadh Sugar rose 9.52%, Shree Renuka Sugars gained 7.80%, Dhampur Sugar advanced 7.71%, Dalmia Bharat Sugar rose 6.84%, Triveni Engineering gained 3.74% and EID Parry added 2.95%.

The sharp gains demonstrate the market’s sensitivity to government policy changes in the sugar industry, where inventory levels, production, exports and domestic prices can have a significant impact on profitability.

Stocks in Focus

Hyundai Motor India gained 2.41% after announcing a price increase of up to 1% across its vehicle portfolio, effective September 2026. The price revision comes as automakers continue to manage input costs and changing market conditions.

Lupin declined 1.06% after its wholly owned subsidiary VISUfarma B.V. entered into an exclusive licensing agreement with US-based Visus Therapeutics Inc. for the commercialisation of YUVEZZI in the European Union, UK, Switzerland, Norway and Iceland. YUVEZZI is an ophthalmic product indicated for the treatment of presbyopia in adults.

Lohia Corp fell 3.79% despite reporting a sharp improvement in quarterly profitability. Consolidated net profit rose 292% to Rs 66.3 crore in Q1 FY27 from Rs 16.9 crore in the corresponding quarter of the previous fiscal year. Revenue from operations increased 60% year-on-year to Rs 503 crore.

EMS gained 1.87% after receiving L-1 bidder status from the Public Health Engineering Department, Government of Rajasthan, for construction of a water treatment plant and related works in Udaipur district. The estimated order value is approximately Rs 222.45 crore.

Aditya Infotech hit its 5% upper circuit after its board approved a proposal to raise up to Rs 1,500 crore through an issue of equity shares by one or more permitted methods.

Aditya Birla Capital advanced 3.28% after announcing its entry into the gold-loan business. The move represents an expansion of the company’s secured lending portfolio and comes at a time when demand for gold-backed credit is attracting increasing attention.

Unicommerce eSolutions rose 2.21% after Urban Company’s Middle East arm partnered with the company to manage its e-commerce operations in the UAE and Saudi Arabia.

Glenmark Pharmaceuticals climbed 3.85% after receiving US Food and Drug Administration approval for Fluticasone Propionate Nasal Spray USP, 0.05 mg per spray.

United Spirits added 1.31% after the Food Safety and Standards Authority of India revoked its June 29, 2026 order concerning the sale of a product manufactured at the company’s Baramati facility.

Strides Pharma Sciences gained 3.92% after receiving an establishment inspection report from the US FDA, indicating closure of the inspection at its Bengaluru facility.

IPO Market Remains Active

The primary market continued to attract strong investor interest, with several public issues receiving substantial subscription.

Tempsens Instruments (India) received bids for 8,64,29,250 shares against 1,51,81,667 shares on offer, translating into a subscription of 5.69 times, according to the stock-exchange data cited in the market update. The issue opened on August 20 and is scheduled to close on August 24, with the price band fixed at Rs 285-300 per share and a minimum lot size of 50 shares. Current market information confirms the August 20-24 bidding window.

Gaja Alternative Asset Management received bids for 5,97,50,454 shares against 2,53,28,946 shares offered, resulting in subscription of 2.36 times. The issue opened on August 19 and closes on August 21, with a price band of Rs 152-160 and a minimum bid of 93 shares.

The strongest demand among the issues listed in the day’s data came from Sunshine Pictures, which received bids for 57,78,96,517 shares against 54,86,051 shares on offer, translating into a staggering 105.34 times subscription. The issue opened on August 18 and closed on August 20, with a price band of Rs 342-360 and a lot size of 41 shares.

Shankesh Jewellers received bids for 7,65,13,440 shares against 2,76,37,400 shares offered, taking total subscription to 2.77 times. The issue opened on August 18 and closed on August 20, with a price band of Rs 88-93 and a minimum lot size of 160 shares.

The strong response to the primary market comes despite the recent volatility in the secondary market and indicates that investor appetite for selected new listings remains robust.

Outlook

Thursday’s recovery has restored some confidence after an extended period of weakness, but the broader market remains exposed to several external risks.

High crude prices, geopolitical uncertainty surrounding the US-Iran conflict, elevated global bond yields and uncertainty over the Federal Reserve’s interest-rate trajectory could continue to generate volatility. At the same time, the US Treasury’s increased bond-buyback programme, a marginally softer dollar and signs of stability in global bond markets provide some support to risk assets.

For Indian equities, the immediate focus will remain on whether the Nifty can clear the 24,290-24,320 resistance band. Holding above the 24,130-24,100 support zone would be important for sustaining the recovery.

The sharp rebound should therefore be viewed as an encouraging development rather than confirmation of a complete trend reversal. After seven consecutive sessions of decline, investors are likely to look for follow-through buying, improving market breadth and stability in global markets before becoming more confident about a sustained recovery.

For now, the Thursday rally has provided a welcome break from the recent selling pressure, with large-cap stocks once again demonstrating their ability to stabilise the market when global cues turn favourable. The coming sessions will determine whether this rebound develops into a broader recovery or remains a technical bounce within a volatile market.

Disclaimer: Stock market investments are subject to market risks. Please consult with a certified financial advisor before making any investment decisions.