Stock market today: Sensex rallies 1,000 pts; Nifty crosses 24,250 - top reasons for rally

Stock market today: Nifty50 and BSE Sensex rallied strongly in trade on Wednesday as IT sector stocks led the recovery. Sensex and Nifty each advanced over 1% even as crude oil prices jumped following escalating tensions between the US and Iran. BSE Sensex ended the day at 77,654.60, up 889 points or 1.16% after rising 1,000 points intraday. Nifty50 closed at 24,250.20, up 265 points or 1.10%.Despite renewed geopolitical uncertainty, the India VIX, the market's volatility gauge, declined more than 3% to 12.18. Broader markets also remained firmly positive, with the Nifty Midcap 100 and Nifty Smallcap 100 indices rising by as much as 0.6%.Sector-wise, IT and metal stocks led the gains, with the Nifty IT and Nifty Metal indices climbing 1-2%. In contrast, the Nifty Realty and Nifty Oil & Gas indices traded in negative territory. Market breadth remained strong, with 1,894 stocks advancing on the NSE against 641 declines, while 102 shares were unchanged.Why did the stock market rise today?Global AI selloff continuesIT stocks, including Infosys and HCL Technologies, were among the strongest performers on Dalal Street, supported in part by India's relative resilience amid the ongoing global selloff in AI-linked stocks. South Korea's KOSPI, heavily weighted towards semiconductor companies, fell about 9%, while Japan's Nikkei declined more than 4%. Taiwan's benchmark index also dropped over 4%.India has comparatively fewer large listed companies directly exposed to the artificial intelligence infrastructure boom, providing some insulation as investors increasingly question whether the massive spending by hyperscale technology companies on AI will generate adequate returns, fuelling concerns about an AI bubble.Rupee strengthensThe rupee appreciated by 12 paise to 95.70 against the US dollar in early trade on Wednesday. Over the past three sessions, traders have attributed the currency's resilience to likely intervention by the Reserve Bank of India, with expectations that the central bank will continue to support the rupee.“Going forward, the rupee will continue to take cues from crude oil prices, the US Dollar Index, FII flows, and the upcoming US Federal Reserve policy decision. Technically, the rupee is expected to trade in the 95.50-96.25 range in the near term,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.Foreign investors return as buyersForeign institutional investors (FIIs) turned net buyers of Indian equities on Tuesday, purchasing shares worth Rs 755 crore, according to provisional NSE data. The buying followed four consecutive sessions of heavy selling by overseas investors.Although the inflows were modest compared with the recent outflows and do not reflect Wednesday's trading activity, a return to net buying by FIIs generally improves investor sentiment.Focus on the US Federal ReserveThe US Federal Reserve is scheduled to announce its latest monetary policy decision later in the day following the conclusion of its Federal Open Market Committee (FOMC) meeting. Markets widely expect the central bank to leave interest rates unchanged, although concerns over persistent inflation continue to influence the outlook among several policymakers.The Fed's policy decision is expected to be closely watched by investors, particularly against the backdrop of rising inflation risks linked to the escalating conflict in the Middle East.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)Get the latest Business News and Live updates. Download the TOI app.