Key Highlights

• Big gain: Sensex rose 1,533.72 points (2.11%) to 74,315.61; Nifty climbed 374.65 points (1.66%) to 22,997.35.
• The trigger: Falling crude oil prices eased inflation worries.
• Just short: Nifty touched 23,000 during the day but closed just below it.
• Narrow rally: Midcaps fell 0.36% and small caps 1.31%.
• Rupee: Gained about 9 paise to 95.05.

Indian markets ended sharply higher on Thursday as easing crude oil prices lifted sentiment. Sensex surged 1,533.72 points, or 2.11%, to 74,315.61, while Nifty rose 374.65 points, or 1.66%, to 22,997.35.

Private banks and IT led the gains, with Tech Mahindra, ICICI Bank and Bharti Airtel the top Nifty gainers. PSU banks were the weakest sector.

Why It Matters: India Decouples From Asia

The rally stood out against a global backdrop. Earlier in the day, South Korea’s Kospi had plunged over 7% and Japan’s Nikkei over 4%, as hotter US inflation triggered a sell-off in AI-linked tech stocks. India, with less exposure to that AI trade, moved in the opposite direction.

Analysts had suggested that a correction in global AI stocks could slow foreign selling in India. Thursday’s move, led by large banks and IT, is an early sign of that thinking, though sustained foreign buying has yet to show up in the data.

The Catch: A Narrow Rally

Beneath the headline numbers, the picture was less rosy. While large caps surged, the Nifty Midcap index fell 0.36% and the Smallcap index dropped 1.31%. That means gains were concentrated in a few heavyweight stocks, while many smaller companies lost ground. Broad-based rallies tend to be more durable.

“Near-term sustainability will therefore depend on Q2 earnings delivering on revenue and margins, broader market participation and evidence of returning foreign flows,” analysts said.

Key Levels

Nifty briefly crossed 23,000 intraday but could not hold above it at the close.

This Week So Far

With oil cooling and India holding firm while Asia fell, Thursday was a strong day for Dalal Street. But until mid- and small-caps join in and foreign money returns, analysts remain cautious about calling it a lasting recovery.

With inputs from IANS.