Indian equity benchmarks Sensex and Nifty closed higher on Wednesday, extending a robust five-day rally to reach a two-month high, driven by positive sentiment in mid and small-cap segments despite a sharp sell-off in IT stocks due to global tech trends and US political shifts.

Indian equity benchmarks Sensex and Nifty closed higher on Wednesday, extending a robust five-day rally to reach a two-month high, driven by positive sentiment in mid and small-cap segments despite a sharp sell-off in IT stocks due to global tech trends and US political shifts.

Indian equity benchmarks Sensex and Nifty closed higher on Wednesday, extending a robust five-day rally to reach a two-month high, driven by positive sentiment in mid and small-cap segments despite a sharp sell-off in IT stocks due to global tech trends and US political shifts.

Indian equity benchmarks ended Wednesday's trading session on a cautious note, with the 30-share BSE Sensex rising 383.55 points, or 0.50 per cent, to settle at 77,301.40, its highest close in more than two months.

During the day, it surged 478.19 points, or 0.62 per cent, to 77,396.04. In the five-day rally through Wednesday, Sensex soared by over 4,000 points or 5.4 per cent. The 50-share NSE Nifty was up 149.75 points, or 0.63 per cent, to end at 23,960.60.

Despite weakness in benchmark indices, the market remained largely positive, indicating that buying interest continued in several pockets of the market. But the interesting point to note was the list of laggards in today's market session, with IT stocks leading the way.

Tata Consultancy Services, HCL Tech, Infosys and Eternal were among the laggards. A sharp sell-off in the global technology stocks was witnessed, reflecting the investor sentiment who are questioning the sustainability of AI-led investments. The developments in the US midterm elections could have also weighed on investors.

The influence of American voters' response to the Trump administration, which faced stunning defeats in its strongholds such as Texas, Georgia and Iowa. also reflected in Indian market sentiments.

"Diwali fireworks continued on Dalal Street, with mid and smallcaps extending their outperformance as risk appetite strengthened. The US midterm outcome improved global sentiment, raising expectations of a more measured approach to trade and tariff policies and potentially supporting FII flows into emerging markets," said Vinod Nair, Head of Research, Geojit Investments Limited, to PTI. Foreign Institutional Investors (FIIs) bought equities worth Rs 6,836.81 crore on Tuesday, according to exchange data.

According to Reuters, market analysts say a possible effect of the Democrats' win could be a potential slowdown in AI spending, which could help the $315 billion sector that has been disrupted by the rapid AI

development. What was witnessed today as selling in IT stocks could also likely be due to some caution about the changing political landscape in the US.

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