The Indian stock market experienced a slight recovery on Thursday, with the Sensex and Nifty closing marginally higher after a last-minute buying spree, largely in the closing auction session. However, this recovery lacked broad-based conviction, as investors remained concerned about the escalating conflict in the Middle East and Brent crude oil prices crossing the $102 per barrel mark, fueling inflation and growth worries for India. Gains were concentrated in large-cap financial stocks, while broader market segments and small-caps saw declines. Foreign institutional investors continued their selling trend, contributing to a fragile market sentiment with benchmarks still down for September and analysts warning of potential further corrections.

The Indian stock market experienced a slight recovery on Thursday, with the Sensex and Nifty closing marginally higher after a last-minute buying spree, largely in the closing auction session. However, this recovery lacked broad-based conviction, as investors remained concerned about the escalating conflict in the Middle East and Brent crude oil prices crossing the $102 per barrel mark, fueling inflation and growth worries for India. Gains were concentrated in large-cap financial stocks, while broader market segments and small-caps saw declines. Foreign institutional investors continued their selling trend, contributing to a fragile market sentiment with benchmarks still down for September and analysts warning of potential further corrections.

The Indian stock market experienced a slight recovery on Thursday, with the Sensex and Nifty closing marginally higher after a last-minute buying spree, largely in the closing auction session. However, this recovery lacked broad-based conviction, as investors remained concerned about the escalating conflict in the Middle East and Brent crude oil prices crossing the $102 per barrel mark, fueling inflation and growth worries for India. Gains were concentrated in large-cap financial stocks, while broader market segments and small-caps saw declines. Foreign institutional investors continued their selling trend, contributing to a fragile market sentiment with benchmarks still down for September and analysts warning of potential further corrections.

The Indian stock market managed to break a three‑session losing streak on Thursday. However, the recovery was modest and heavily skewed to a late burst of buying rather than broad‑based conviction.

The Sensex closed 138.36 points higher at 74,902.59, up 0.19 per cent, while the Nifty added 46.30 points, or 0.20 per cent, to finish at 23,477.80, with much of the move coming in the new closing auction session rather than during regular trade.

Underlying caution

For most of the day, the benchmark indices were largely flat, reflecting investors’ unease over Brent crude’s climb above $102 a barrel and an escalating conflict in the Middle East.

It was only in the closing auction session—introduced in August to determine official closing prices through a 20‑minute call auction—that indicative levels for the Sensex and Nifty briefly jumped more than 1 per cent before settling closer to their earlier marks.

The Sensex traded in a narrow intraday band between 74,598.47 and 74,910.96.

Gains were concentrated in large financials, with HDFC Bank and Axis Bank seeing closing‑end buying that helped pull the indices into positive territory.

Power Grid, UltraTech Cement, NTPC, Tech Mahindra, Bharti Airtel, and Larsen & Toubro also closed higher, while HCL Tech, Tata Steel, Trent, and ITC were among the biggest index laggards.

Eight of the 16 major sectoral indices ended in the red, while broader small‑caps and mid‑caps lost 0.1 per cent and 0.4 per cent respectively. This meant that gains were more focused on large‑cap, index‑linked adjustment.

Oil, geopolitics and macro concerns

Brent crude gaining 1.19 per cent to $102.2 a barrel revived inflation and growth worries for the oil‑import‑dependent country, especially after reports of Iran attacking 10 ships near the Strait of Hormuz following the US attack that sank five Iranian oil tankers. The latter is now the largest shipping attack in the six‑month‑old conflict, and has understandably kept global energy markets on edge.

The rising Brent also made domestic investors nervous ahead of key US consumer‑price data due later this week, which could influence Federal Reserve rate expectations. This could impact foreign flows into Indian markets.

Adding to the pressure were foreign institutional investors, who remained net sellers by offloading equities worth ₹582.99 crore on Wednesday, despite domestic buyers cushioning the fall.

Despite Thursday’s turnaround, the benchmark index Sensex is still down 2.7 per cent and Nifty by 2.5 per cent so far in September. Six out of eight Nifty sessions ended lower this month. Analysts are of the opinion that the market remains vulnerable to further correction due to deteriorating macro trends and rising global volatility. But for now, Thursday’s close seems to have offered some respite from the recent slide.

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