Sensex, Nifty Stage Strong Rebound as Global Risk Appetite Returns

Indian equities snap three day losing streak with broad based buying

Indian benchmark indices rebounded sharply on Thursday, snapping a three session losing streak as a global risk on mood and selective bargain hunting lifted investor sentiment. After days of persistent selling pressure that erased nearly ₹14 lakh crore in market capitalisation, Dalal Street saw a decisive turnaround in early trade, with gains spread across sectors.

The BSE Sensex surged more than 800 points at its intraday peak, while the Nifty 50 decisively moved back above the 25,300 level, reclaiming territory lost earlier in the week. All sectoral indices traded in the green during the opening phase, signalling a broad based recovery rather than a narrow rally.

The rebound comes after a bruising stretch for Indian equities. On Wednesday, the market closed in the red for the third consecutive session, weighed down by global uncertainty, mixed corporate earnings and persistent foreign investor selling. Over those three sessions, the Sensex had declined more than 1,660 points, while the Nifty 50 slipped close to 2 percent.

Although losses were partially recovered by the end of Wednesday’s session, the tone remained cautious. The Sensex closed down 271 points or 0.33 percent at 81,909.63, while the Nifty 50 settled 75 points lower or 0.30 percent at 25,157.50. That backdrop made Thursday’s sharp upmove particularly notable, as it marked a clear break from the recent negative momentum.

At the opening bell on Thursday, benchmark indices jumped sharply, tracking positive cues from global markets. The Sensex rose more than 550 points within minutes of the start, while the Nifty crossed 25,300 early in the session. As trading progressed, the Sensex extended gains beyond 700 points and briefly surged over 800 points, with the Nifty reclaiming the crucial 25,400 mark at its intraday high.

PSU banks led the rally, reflecting renewed optimism around financial stocks after recent underperformance. Heavyweights such as Mahindra and Mahindra and Adani Ports gained around 2 percent in early trade, adding further strength to the benchmarks.

Market participants attributed the sharp rebound to a combination of global relief, short covering after the recent selloff and selective value buying in beaten down stocks.

A key driver of Thursday’s rally was the improved global backdrop. Asian markets traded higher, tracking gains on Wall Street overnight. S&P 500 futures were up 0.3 percent by late morning Tokyo time, while Japan’s Topix gained 0.9 percent and Australia’s S&P ASX 200 rose 0.6 percent. Hong Kong’s Hang Seng and China’s Shanghai Composite also posted modest gains.

European markets signalled a strong start as well, with Euro Stoxx 50 futures rising around 1.2 percent. The positive tone followed reports that geopolitical tensions had eased after indications of a framework agreement related to Greenland, calming fears of fresh tariffs and broader trade disruptions.

This easing of global risk aversion helped lift emerging market sentiment, including Indian equities, which had been under pressure in recent sessions.

Supporting sentiment further, the Indian rupee recovered from its all time low in early trade. The currency strengthened by around 15 paise to trade near 91.50 against the US dollar, after hitting record lows earlier this week. The recovery came amid a softer dollar index and reduced safe haven demand globally.

While currency volatility remains a concern for foreign investors, the rupee’s bounce offered some near term relief to equity markets, particularly to sectors sensitive to import costs and foreign capital flows.

Several individual stocks saw sharp moves amid earnings announcements and company specific developments.

Waaree Energies surged nearly 10 percent after reporting strong revenue and profit growth for the December quarter, reflecting continued momentum in the renewable energy space.

Dr Reddy’s Laboratories rose more than 4 percent despite reporting a 14 percent year on year drop in third quarter net profit. Investors appeared to focus on management commentary and expectations of margin stabilisation going forward.

Eternal shares jumped up to 7 percent after the company posted robust earnings growth and announced a key leadership transition, which was received positively by the market.

Senco Gold gained over 2 percent following its announcement to acquire a 68 percent stake in jewellery brand Melorra, strengthening its presence in the lifestyle jewellery segment.

On the downside, EPack Prefab Technologies hit a 10 percent lower circuit after its quarterly results disappointed investors. Hindustan Copper also slipped sharply, reflecting profit booking after recent gains.

Sectorally, PSU banks emerged as the top performers, extending gains as investors rotated into value oriented financial stocks. Infrastructure, metals and energy stocks also traded higher, benefiting from improved global sentiment and expectations of stable domestic demand.

FMCG stocks participated in the rally as well, supported by expectations of mid single digit to low double digit revenue growth in the December quarter. Analysts expect easing input cost pressures and steady rural demand to support margins for consumer goods companies.

Technology stocks, which had seen selling pressure earlier amid global concerns, also stabilised as US tech futures moved higher.

Even as equities rallied, volatility remained evident in other asset classes. Indian silver exchange traded funds crashed as much as 20 percent during Thursday’s session, wiping out their premium to international and physical markets.

Funds such as Nippon India Silver ETF, ICICI Prudential Silver ETF and Kotak Silver ETF fell sharply, slipping below their indicative net asset values. The sharp correction reflected the unwinding of unusually steep premiums amid heightened volatility in global precious metals markets.

The move served as a reminder of the risks associated with crowded trades and speculative excess, even as equities found support.

Foreign investor activity continues to be a key variable for Indian markets. Data shows that overseas investors have remained net sellers in early 2026, with significant outflows from FMCG, financial services and information technology stocks.

At the same time, gross foreign direct investment into India slipped marginally in November to $6.4 billion, while net FDI outflows narrowed compared with October. Market participants are closely watching global interest rate expectations and currency movements for clues on the sustainability of foreign flows.

On the policy front, the Reserve Bank of India has maintained an optimistic assessment of domestic growth prospects. In its latest bulletin, the central bank said India is likely to remain the fastest growing major economy, supported by strong high frequency indicators, even as geopolitical tensions pose risks.

While Thursday’s sharp rally has provided relief, analysts caution against reading too much into a single session’s move. The recent selloff has highlighted the market’s sensitivity to global developments, earnings surprises and currency movements.

Market veterans note that the rebound may partly reflect short covering and tactical buying rather than a clear shift in trend. Sustained upside will likely depend on a combination of stable global cues, supportive domestic data and clarity on corporate earnings.

For now, investors appear to be selectively returning to quality names after the recent correction, taking advantage of improved valuations in certain pockets of the market.

Thursday’s strong rebound marked an emphatic pause in the recent decline on Dalal Street, with the Sensex and Nifty reclaiming key levels amid broad based buying. Supported by positive global cues, a recovering rupee and selective value hunting, Indian equities showed resilience after days of pressure.

However, with global uncertainty still lingering and foreign investor sentiment cautious, market participants remain watchful. The coming sessions will be crucial in determining whether this rally can be sustained or whether volatility will continue to dominate trading in the near term.