The markets rebounded strongly on Wednesday, August 5, with the Sensex climbing more than 450 points and the Nifty 50 holding above 24,600 in morning trade. Falling crude oil prices, sustained foreign institutional investor buying, positive global cues and the Reserve Bank of India’s decision to keep the repo rate unchanged at 5.25% helped lift investor sentiment.
The Sensex rose as much as 0.8% during the session, while the Nifty also moved higher after Tuesday’s decline. At around 11 am, the Nifty was at 24,650.15, while the Sensex was holding gains of more than 400 points. The recovery came after the benchmark indices had snapped a four-session winning streak in the previous session.
Among the major Sensex gainers, InterGlobe Aviation (IndiGo) and Bharti Airtel were at the forefront, with both stocks rising up to around 3% in early trade. Larsen & Toubro, Mahindra & Mahindra and UltraTech Cement were also among the stocks supporting the benchmark. IndiGo led the early Sensex gainers with a rise of about 2.25%, according to market updates.
Ola Electric was another major stock in focus, jumping more than 8%. The electric vehicle maker gained after signing a memorandum of understanding with Axis Energy to deploy up to 20 GWh of battery energy storage systems by 2032. The agreement is the first major partnership for Ola Mahashakti, the company’s planned energy-storage platform.
Deepak Nitrite also attracted buyers, rising around 4% after reporting a sharp 209% year-on-year increase in first-quarter FY27 profit. Revenue rose 36% during the quarter, giving investors another earnings-related trigger for the stock.
However, the market recovery was not broad-based. Protean eGov emerged among the notable losers, with its shares falling around 6% despite a 19% year-on-year rise in first-quarter revenue to ₹251 crore. The weak stock reaction showed that investors remained selective and were not rewarding earnings growth automatically.
BSE Ltd was another stock under pressure, declining around 2% despite reporting a 62% year-on-year jump in first-quarter net profit to ₹874 crore. The contrasting performance highlighted the cautious approach adopted by investors towards several individual stocks despite the broader market rally.
Muthoot Finance also remained under pressure. Its shares had fallen nearly 8% over the previous two trading sessions after the gold-loan company reported weaker net interest margins and loan yields for the June quarter. Higher funding costs and increasing competition from banks and other financial companies are expected to remain concerns for the lender.
Sectoral trends remained mixed. Realty, REITs, PSU banks and auto stocks attracted buying interest, while healthcare, pharma, private banks and IT stocks faced selling pressure. The uneven movement suggested that investors were rotating between sectors rather than making broad-based bets across the market.
A major support for Indian equities came from lower crude oil prices. Brent crude slipped below the $80-a-barrel level amid hopes of a possible agreement between the US and Iran. For India, lower crude prices are generally positive because the country depends heavily on imports to meet its energy requirements. Cheaper oil can ease inflationary pressure, support the rupee and reduce the pressure on the country’s import bill.
The rupee also strengthened, opening below ₹95 per US dollar for the first time since July 8, at around ₹94.92. The stronger currency added to the positive market mood.
Investors were also closely watching the RBI’s monetary policy decision. The Monetary Policy Committee kept the repo rate unchanged at 5.25%, while retaining a neutral stance. The RBI raised its FY27 real GDP growth forecast to 6.7% from 6.6%, while lowering its FY27 CPI inflation forecast to 5% from 5.1%.
The market was also taking cues from global equities. US markets had ended at record highs, while several Asian markets advanced on expectations of easing geopolitical tensions. Japan’s Nikkei futures and Topix were particularly strong, while US stock futures also remained positive.
At the same time, traders remained cautious about the new closing auction session (CAS) for futures and options stocks. The mechanism had contributed to unusual price movements during Tuesday’s expiry session, with differences between prices around 3:30 pm and the final closing levels. Analysts said the changes had increased volatility and created complications for some derivatives-linked strategies and arbitrage funds.
The combination of softer crude prices, stronger foreign fund flows, resilient corporate earnings and supportive global markets has improved sentiment. Still, the mixed sectoral performance and sharp movements in individual stocks such as Protean eGov, BSE and Muthoot Finance show that investors remain selective.
With the Nifty holding above 24,600 and the Sensex gaining more than 450 points, traders will now watch whether the benchmarks can sustain their recovery through the remainder of the session. Earnings, foreign fund flows, crude oil prices, the rupee and developments around the new market closing mechanism are likely to remain key drivers of the next move.