Sensex and Nifty Accelerate as IT Stocks Rally, Signaling Shift Away from AI Bubble

Sensex and Nifty Accelerate as IT Stocks Rally, Signaling Shift Away from AI Bubble​

Equity benchmarks witnessed a robust gap up on July 29, fueled by strong buying in the information technology sector. The positive momentum suggests investors are actively re-evaluating high-flying global chipmakers in favor of India’s resilient tech services firms. Both major indices saw significant gains as domestic institutional buying and foreign investment flowed into key stocks.

Market Indices Rally on Strong Buying​

At 09:18 am, the Sensex surged by 729.32 points or 0.9%, reaching 77,495.24. The Nifty followed suit, rising by 205.25 points or 0.86% to trade at 24,190.60.

The broader market showed healthy stock distribution, with 1,655 shares advancing against 689 that declined and 139 remaining unchanged. This balanced activity underscored the broad-based strength supporting the major indices despite global tech volatility.

IT Sector Drives Market Gains Amid Global Tech Slowdown​

A primary catalyst for the market ascent was sustained enthusiasm seen in Indian technology stocks. The dedicated IT index rose by 2.5%, extending its rally to over eight percent across three days.

This trend signifies a decisive shift as investors move out of the speculative artificial intelligence trade and into established information technology names that have faced prolonged slump periods. This divergence is noteworthy given the recent volatility in global chip markets.

The movement contrasts sharply with global semiconductor indicators, as South Korea’s Kospi Index—a key barometer for AI plays—plunged more than 30% from its mid-June peak. Jefferies Financial Group Inc recently maintained a neutral rating on India's IT sector, suggesting that the reversal of the AI trade could provide significant tactical upside to the domestic technology industry.

Foreign Institutional Investment Inflows Boost Sentiment​

Foreign institutional investors (FIIs) added considerable capital to the Indian market on Tuesday. Provisional data revealed FII net purchasing shares worth Rs 755 crore in a single session.

This consistent foreign inflow represents their net purchase across five sessions, providing a strong fundamental layer of support for the market rally. The continued confidence shown by international investors reinforces the resilience and growth prospects within India's equity markets.

Analyst Outlook and Technical Support​

Analysts maintain an optimistic outlook, provided that certain technical thresholds are maintained in the immediate term. Market experts indicated that the upward momentum has further room to grow as long as the Nifty index sustains levels above 24,000.

The combination of strong sectoral performance—led by IT services—coupled with steady foreign capital influx provides a solid foundation for sustained market appreciation.