Sensex jumps 1,000 points: 3 reasons why markets are rising today

Give me the latest Sensex and Nifty update in a long line At 2:10 pm, the BSE Sensex was trading 966.32 points higher, up 1.35% at 72,559.56, while the Nifty 50 gained 315.05 points, or 1.42%, to trade at 22,546.85 as the benchmark indices extended their recovery after Thursday's sharp sell-off.

In Short

• Sensex jumped 1,000 points, Nifty breached 22,500 in market rebound
• IT stocks led recovery amid US green-card restriction clarifications
• TCS Q2 results and bargain buying boosted market sentiment

The stock market staged a rebound on Friday, October 9, with the Sensex jumping over 800 points and the Nifty approaching the 22,500 mark, as investors bought beaten-down stocks and IT shares rallied despite concerns over the US government's green-card restrictions on major technology companies.

The recovery came as a surprise after Thursday's sharp sell-off, as investors had feared further pressure on IT stocks after the US government suspended TCS, Infosys, Wipro and HCLTech, among other firms, from the Permanent Labour Certification (PERM) programme, a key step in the employment-based green-card process.

However, clarifications from companies about the limited use of the US Permanent Labour Certification (PERM) programme, coupled with TCS's latest quarterly results and bargain buying after the recent correction, helped lift sentiment.

At 10:11 am, the BSE Sensex was trading at 72,397.35, up 804.11 points or 1.12%. The index had opened at 71,776.67 and touched an early high of 72,371.94.

The Nifty 50 gained 264.15 points, or 1.19%, to 22,495.95 at 10:13 am, after opening at 22,314.95.

The rally was broad-based, with all the major broad-market indices trading higher. The Nifty 100 rose 1.16%, the Nifty 200 gained 1.21% and the Nifty 500 advanced 1.12%. The Nifty Midcap 50 and Nifty Midcap 100 climbed 1.35% and 1.39%, respectively, while the Nifty Smallcap 100 rose 0.64%.

IT STOCKS LEAD THE RECOVERY

The biggest boost came from IT stocks, which had been under pressure amid concerns over the US green-card restrictions and the outlook for technology spending.

The Nifty IT index jumped 3.02% to 28,574.85 in early trade, emerging as the strongest-performing sectoral index in the latest market snapshot.

TCS shares surged 4.98%, while Infosys gained 3.07%, Wipro rose 3.23%, and Tech Mahindra advanced 2.13%. Coforge climbed 2.82%, Persistent Systems rose 2.66%, Mphasis gained 3.13%, and HCLTech advanced 1.95%.

The rally is significant because IT stocks had been expected to face further pressure after the US government suspended several technology companies from the PERM programme.

However, companies have begun clarifying how much they rely on the programme, helping investors assess the immediate impact rather than react solely to the headline.

TCS told stock exchanges on Friday that its PERM applications had been in single digits over the past two years. It said it did not expect the suspension to affect its workforce strategy or customer engagements.

The company also reiterated its plan to hire an additional 15,000 people in the US over the next five years, emphasising that its workforce strategy was anchored in hiring local talent.

Microsoft has also issued a clarification regarding its H-1B visa petitions. However, the H-1B visa programme and the PERM green-card process are distinct, and the US action specifically concerns permanent labour certification applications.

These clarifications may have eased immediate concerns, although the longer-term implications of the restrictions remain uncertain.

BARGAIN BUYING AFTER THURSDAY'S CRASH

Another important factor behind Friday's rally is bargain buying.

On Thursday, the Sensex plunged 1,045.46 points, or 1.44%, to close at 71,593.24. The Nifty dropped 371.25 points, or 1.64%, to settle at 22,231.80.

The sharp fall made several stocks cheaper than they had been before the sell-off, creating opportunities for investors looking to buy companies they believe have long-term growth potential.

This is commonly known as bargain buying or buying the dip. When markets decline sharply in a short period, some investors step in to purchase stocks at lower prices, expecting that valuations may become more attractive even if near-term sentiment remains weak.

The buying can trigger a rebound as fresh demand supports share prices. It can also lead to short covering, in which traders who had bet on falling prices buy shares to close their positions, adding to the upward momentum.

However, not every rebound signals that a market has reached its bottom. Friday's gains could partly reflect a technical recovery after the steep fall, and investors may continue to respond sharply to changes in global cues.

The broader market's performance suggests that buying is not limited to IT stocks. The Nifty FMCG rose 1.55%, the Nifty PSU Bank gained 1.79%, the Nifty Financial Services 25/50 advanced 1.34%, and the Nifty MidSmall Financial Services index climbed 1.56%.

The Nifty Auto, Metal, Media, Realty, Pharma, Healthcare and Consumer Durables indices also traded higher. India VIX, a measure of expected market volatility, fell 4.25% to 14.63, indicating some easing in near-term market anxiety.

TCS Q2 RESULTS PROVIDE AN ADDITIONAL TRIGGER

TCS's September-quarter results, announced on Thursday, have also helped support sentiment towards IT stocks.

The company reported consolidated net profit of Rs 13,884 crore for the second quarter of FY27, up around 15% from Rs 12,075 crore a year earlier. Revenue increased 11.2% year-on-year to Rs 73,188 crore.

Its annualised artificial intelligence (AI) revenue rose nearly 20% quarter-on-quarter to $3.1 billion from $2.6 billion in the July-September quarter. AI revenue has now crossed 10% of the company's overall revenue.

TCS also reported total contract value of $9.6 billion for the quarter, offering investors another indicator of business momentum.

The AI performance has become an important part of the investment case for IT companies as clients increasingly explore automation and AI-led services. Stronger AI revenue can help companies tap new business opportunities and diversify their revenue streams.

However, TCS's overall revenue growth remains a concern. Revenue rose just 0.5% sequentially in constant currency terms, marking its weakest September-quarter growth in three years. The company has also indicated that discretionary technology programmes remain under scrutiny.

This means investors are balancing the positive momentum in AI-related business against a still-cautious client spending environment.

SOME RELIEF FROM CRUDE OIL, BUT RISKS REMAIN

Oil prices also eased in early trade on Friday, offering some relief to markets after the recent surge.

Brent crude was down 1.31% at $102.91 per barrel, while US West Texas Intermediate crude fell 1.14% to $90.45, according to the market data available earlier in the session.

However, Brent crude remains above $100 per barrel, keeping concerns about India's import bill, inflation and corporate costs alive. A sustained rise in oil prices can also put pressure on the rupee and complicate the outlook for interest rates.

Foreign institutional investor (FII) selling remains another major concern. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said elevated crude prices and high US bond yields continued to weigh on the Indian market.

He said these headwinds had shifted the near-term market structure towards a “sell on rally” approach, with foreign investors likely to remain cautious despite attractive valuations.

Vijayakumar added that FIIs had sold equities worth Rs 36,210 crore through exchanges in October so far.

The recent sell-off has therefore created opportunities for long-term investors, but it has not removed the macroeconomic risks weighing on the market.

RBI'S TIGHTER POLICY STANCE IS A HEADWIND

The market is also dealing with the impact of the Reserve Bank of India's latest monetary policy decision.

The RBI raised the repo rate by 25 basis points to 5.50% and shifted its policy stance from neutral to calibrated tightening. The move has added to concerns about borrowing costs, bond yields and the impact of tighter financial conditions on economic activity.

Higher interest rates can affect valuations, particularly for stocks whose prices depend heavily on expectations of future earnings growth. Banks and other financial companies can also respond differently depending on their funding costs, lending rates and margins.

The policy decision, combined with foreign fund outflows and elevated crude prices, contributed to the pressure seen in the market after the RBI's Monetary Policy Committee announcement.

Friday's rebound suggests investors are willing to buy at lower levels, but it remains to be seen whether the gains can hold as these concerns persist.

TOP SENSEX GAINERS AND LOSERS

Among the Sensex constituents, TCS led the gains, rising 4.98%. Infosys climbed 3.07%, Adani Ports gained 3.09%, ITC advanced 2.22%, and Tech Mahindra rose 1.97%. Power Grid, HDFC Bank, Larsen & Toubro, Trent and HCLTech were also trading higher.

The gains were broad-based, with most of the major Sensex stocks in positive territory. ICICI Bank was down 0.13%, Reliance Industries declined 0.37%, and Bharat Electronics fell 0.61%, making them among the few notable losers in the snapshot.

The combination of IT-led buying and a recovery across broader market segments has helped the benchmarks recover some of Thursday's losses.

WILL THE MARKET RALLY SUSTAIN?

Friday's rally reflects a change in near-term sentiment after a sharp correction. Company clarifications have helped investors reassess the immediate risks from the US green-card restrictions, while TCS's AI revenue growth has supported buying in IT stocks.

At the same time, the rise in mid-cap and financial stocks indicates that investors are also looking beyond the IT sector for opportunities at lower prices.

But the rebound does not guarantee a sustained recovery. FII selling, crude oil prices above $100 per barrel, high US bond yields and the RBI's tighter policy stance remain key risks.

The market's next move will depend on whether buying continues beyond the initial rebound and whether global conditions become more supportive. For now, Friday's gains point to bargain buying and a recovery in risk appetite, rather than a clear sign that all the pressures on Indian equities have eased.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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