IT Stocks Lead Market Recovery as Global Tech Rally Offsets Cautious Session

Indian benchmark indices ended the week on a positive note on Friday, snapping a two-session losing streak. The recovery was largely powered by a global technology rally, which was sparked by Nvidia's strong quarterly results and positive revenue outlook. This momentum sent domestic IT stocks surging, helping mask an otherwise cautious and range-bound trading session.

The Nifty 50 closed the day at 24,175, registering a gain of 84 points or 0.35 per cent. The BSE Sensex settled at 77,264, up 0.43 per cent. Leading the sectoral gains was the Nifty IT index, which jumped 3.5 per cent with major firms such as TCS, Tech Mahindra, and Infosys emerging among the top Nifty 50 gainers. Metals and pharma sectors also ended the session in the green, while FMCG, auto, and energy faced selling pressure. The Bank Nifty index remained nearly flat, slipping 0.02 per cent to close at 57,496.

Broader markets tracked the benchmarks modestly. The Nifty Midcap 100 edged up 0.05 per cent, and the Nifty Smallcap 100 gained 0.20 per cent, continuing to trade near all-time highs. The advance-decline ratio improved to 1.25, although within the Nifty 500 universe, 286 stocks declined compared to 207 advancing issues. National Stock Exchange cash turnover slipped 4 per cent from the previous session. For the entire week, the Nifty declined 0.3 per cent, marking its third consecutive weekly loss.

Market sentiment found additional support from a pause in West Asia tensions and a rebound in foreign institutional investor (FII) inflows during the month. On the macroeconomic front, India's Index of Industrial Production grew 6.7 per cent year-on-year in July 2026, moderating from an upward-revised 8.8 per cent in June. While manufacturing output growth slowed to 7.3 per cent, capital goods expanded in double digits for the fourth consecutive month, and consumer durables output surged 10.5 per cent.

In currency and commodities, the Indian rupee strengthened by 0.18 per cent to 85.36 against the US dollar. This appreciation was supported by crude oil prices facing resistance below $90 per barrel as West Asia supply routes remained undisrupted. Meanwhile, MCX Gold pulled back nearly 2 per cent from ₹1,62,500 to around ₹1,59,000 as the dollar index regained strength above 99.15.

Looking ahead, market participants are closely monitoring the Jackson Hole symposium, particularly remarks from Federal Reserve officials regarding the future rate trajectory. Technically, the Nifty remains below its 20-day and 50-day exponential moving averages, keeping the near-term market structure cautious. Analysts note that for the current rebound to sustain, broader participation from banking and other heavyweight sectors alongside technology will be essential.

"The recent market movement demonstrates how global developments directly impact domestic sector performance, particularly in technology. While the IT sector provided a necessary cushion, sustainable broader market recovery requires balanced participation across banking and heavyweight segments. Businesses and investors must maintain a cautious outlook, keeping a close watch on macroeconomic data, currency stability, and impending central bank policies." — Dr. Shishir Gupta, Founder & CEO, StartupLanes