After seven straight days in the red, Dalal Street finally found its footing on Thursday. The Sensex and Nifty both closed higher, powered by a bounce in financials and IT as global bond markets calmed down.
The BSE Sensex settled at 77,537.72, up 628.04 points or 0.82%. The NSE Nifty 50 ended at 24,231.85, gaining 153.55 points or 0.64%. The rally began at the open itself — Sensex started at 77,468.45 and Nifty at 24,225.45 — and held through the session despite profit booking near the highs.
This ends Nifty’s longest losing run in 11 months, a 2.1% slide driven by crude and US yields.
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WHY MARKETS ROSE TODAY
1. US Treasury move soothes global nerves
The trigger came from overseas. The US Treasury announced it would double buybacks of long-duration bonds to arrest a sharp spike in yields. The 30-year yield had hit a 2007 high earlier this week. That eased pressure on EMs.
Asian markets jumped over 2% and the dollar slipped. Gift Nifty had already hinted at a positive start. All 16 Nifty sector indices opened in the green. Small and midcaps also gained 0.6% each.
2. RBI governor flags $80 billion inflows
RBI Governor Sanjay Malhotra told Financial Express that the central bank expects inflows of at least $80 billion through subsidised swap windows launched in June. The schemes were meant to bolster FX reserves.
Malhotra called the early closure of the NRI deposit swap “prudent and data-driven” and said it came “from a position of strength”. He added that RBI’s net forward forex position is “very manageable” and policy will remain focused on curbing “excessive volatility”.
3. Dip buyers return
After last week’s selloff, valuations in IT and private banks looked attractive. That brought back domestic buying. The rupee also steadied around 95.62-95.66 vs the dollar, with traders suspecting RBI intervention.
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WHAT’S STILL WEIGHING ON SENTIMENT
Crude keeps markets on tenterhooks
Oil remains the biggest risk. Brent is holding near $91-$92 as the Middle East conflict drags on. India’s merchandise trade deficit ballooned to $31.98 billion in July — a 6-month high — as the oil bill jumped and freight rates stayed high.
The war is also disrupting edible oil. India is set for record soyoil imports of 620,000 tonnes in August, up 46% from the monthly average, as sunflower shipments from Russia and Ukraine get delayed. To manage LPG risks, the government has asked refiners to produce 63,810 tonnes of cooking gas daily.
SEBI goes tough on Closing Auction manipulation
Regulatory action spooked traders. SEBI banned two entities — Copthall Mauritius Investment, linked to JPMorgan, and Mansi Share and Stock Broking — for alleged manipulation in the new Closing Auction Session on Aug 13, when Sensex weekly derivatives expired.
SEBI impounded Rs 36.8 crore and said the firms distorted closing prices through aggressive buy and sell orders. It estimated wrongful gains of Rs 29.6 crore for Copthall and Rs 7.2 crore for Mansi.
CAS was launched on Aug 3 to align with global practice. But thin liquidity in the 3:15-3:20 pm window has caused wild swings. From September, brokers will be allowed to accept orders during that transition period to improve depth.
FIIs continue to sell
The bounce hasn’t changed the big picture. Foreign investors have pulled out more than $50 billion from Indian equities between October 2024 and June 2026. India’s weight in the MSCI EM index has also slipped to below 12% from 21% last September.
Abakkus Investment noted that a heavy IPO calendar will compete for liquidity and could limit upside for the broader market. YTD, Sensex is down 9.8% and Nifty 7.9%.
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GEOPOLITICS & POLICY: DRONES, OIL, AND MINERALS
India doubles down on maritime security
Amid the China tussle in the Indian Ocean, the government signed a Rs 1,943 crore deal to lease two MQ-9B Sea Guardian drones from General Atomics for 30 months. The Navy had earlier leased two MQ-9As in 2020. In 2024, India also ordered 31 armed MQ-9B drones from the US.
The lease “will significantly enhance maritime domain awareness,” the government said.
Supply chain push in Budget 2026 kicks in
To reduce dependence on China, the Budget proposed “rare earth corridors” in Tamil Nadu, Kerala, Andhra Pradesh and Odisha. These minerals are critical for EVs, semiconductors and defence equipment.
On energy security, city gas distributors will get an extra 200 SCM of cheaper domestic gas per new household connection from September. The aim: cut LPG import dependence amid West Asia uncertainty.
China-Russia oil ties complicate things
China has raised Russian crude purchases to 1.25 million bpd in August. That makes it harder for Indian refiners to get discounted barrels. Meanwhile, hopes of an Iran-US ceasefire have faded, keeping freight and insurance costs elevated.
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TECHNICALS AND OUTLOOK
Nifty formed a bullish candle after the 7-day fall. Immediate resistance is at 24,685-24,700, the gap area from Aug 5. Support sits at 24,400. Bank Nifty failed to cross 50,770 and ended weak at 50,368.
“Short-term trend remains positive but consolidation is likely before the next breakout,” said Nagaraj Shetti of HDFC Securities.
The next cues will come from Jackson Hole. Markets will watch for Fed commentary on rate cuts. Domestically, strong Q1 results are a positive, but IPO and block deal supply could keep markets range-bound.
SEBI is also working on reforms for securities lending and short-selling after MSCI flagged India’s market accessibility issues.
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THE TAKEAWAY
Thursday was about relief, not a trend reversal. Bond yield fears eased, RBI sounded confident on flows, and domestic buyers stepped in.
But the overhangs haven’t vanished. Oil near $90, a widening trade deficit, FII selling, and regulatory uncertainty around CAS mean volatility is here to stay.
For now, 77,500 on Sensex and 24,250 on Nifty are acting as new bases. A decisive move above 24,700 for Nifty will be needed to confirm that the correction is over.
Until then, expect stock-specific action, not a broad rally.
