Equities Rally on IT Rebound, Lower Oil; Bond Yields Decline

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

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By Dehuti Jani

July 2, 2026 at 11:52 AM IST

Indian equity benchmarks rose on Thursday, outperforming most Asian markets as lower crude oil prices and a sharp rebound in information technology stocks offset weakness in global AI-related shares. The Nifty50 gained 169.85 points or 0.71% to close at 24,175.70, while the BSE Sensex advanced 579.48 points or 0.75% to 77,502.12.

Sentiment was supported by a decline in Brent Crude below $71 per barrel after signs of progress in indirect US-Iran talks eased concerns over global energy supplies. Softer oil prices continued to improve India's inflation and current account outlook.

IT stocks led the rally, with the Nifty IT index jumping 4.6%, its strongest intraday gain since May 2025, as investors returned to beaten-down technology stocks after a recent sell-off. Gains were also supported by comments from Fed Chair Kevin Warsh that inflation expectations had eased in recent weeks.

Among Nifty50 constituents, Infosys, Tech Mahindra and Tata Consultancy Services were the top gainers. Broader markets also advanced, with the Nifty MidCap and Nifty SmallCap indices rising 0.48% and 1.25%, respectively. Auto, consumer durables and realty stocks also outperformed.

The rupee declined for a fourth consecutive session despite a weaker US dollar, as arbitrage-related flows and importer demand outweighed likely RBI intervention. Meanwhile, Indian government bonds rallied, with the benchmark 6.94% GS 2036 yield falling to 6.7180% from 6.7563% in the previous session. Lower crude oil prices and sustained foreign portfolio investor buying supported bond prices, although short positioning ahead of Friday's government securities auction limited further gains.

Top Movers of the Day

Infosys jumped 5.8% to ₹1,042.60, leading Nifty gainers as the IT index rebounded sharply on short covering and optimism over AI-led enterprise spending.

Tech Mahindra gained 4.6% to ₹1,424.40 as easing geopolitical tensions and improved global risk appetite triggered buying in technology stocks.

HCL Technologies advanced 4.4% to ₹1,081.40 as investors reversed recent bearish positioning in the IT sector.

Bajaj Finserv rose 3.4% to ₹1,859.10 as financial stocks gained on improving market sentiment.

Mahindra & Mahindra gained nearly 2% to ₹3,187 after reporting healthy June vehicle sales and continued strength in SUVs and tractors.

Exide Industries surged 7% to ₹419.45 as investors accumulated battery and EV-related stocks.

Zensar Technologies rallied 10.7% to ₹472.00, emerging among the top mid-cap IT gainers as buying returned to the technology sector.

Sonata Software gained 3.6% to ₹273.90, extending recent momentum on strong demand for mid-cap technology stocks.

Suven Life Sciences rose 11% to ₹304.40as investors accumulated mid-cap pharmaceutical shares.

HFCL fell 2.9% to ₹206.00 as investors booked profits after the stock's sharp rally this year.

Futures & Options
The Nifty July 2026 futures contract closed at 24,270.10, a premium of 94.40 points over the Nifty 50 cash index, indicating traders maintained a positive outlook for the benchmark. In the cash market, the Nifty 50 climbed 169.85 points, or 0.71%, to close at 24,175.70, supported by broad-based buying.

Market sentiment was further reflected in a sharp decline in volatility. The India VIX, which measures the market's expectation of near-term volatility, dropped 7.21% to 12.29, signalling easing risk perception among investors. In the derivatives segment, Infosys, TCS, and HDFC Bank were the most actively traded individual stock futures contracts on the NSE. The July 2026 futures and options contracts are scheduled to expire on 28 July 2026.

Bonds
India’s government bond benchmark yields declined on Thursday as easing crude oil prices and sustained foreign portfolio investor buying outweighed the impact of higher US Treasury yields. The benchmark 6.94% GS 2036 yield fell to 6.7180% at the close from 6.7563% on Wednesday.

Dealers said continued FPI buying supported government securities as investors positioned for the potential inclusion of Indian bonds in the Bloomberg Global Aggregate Index. However, gains were capped as some traders built short positions ahead of Friday's 340-billion-rupee government securities auction, limiting further upside in bond prices.

Forex
Indian rupee declined for a fourth consecutive session against the US dollar on Thursday as arbitrage-related market flows and merchant dollar demand weighed on the local currency, despite broad-based weakness in the greenback and likely intervention by the Reserve Bank of India.

The rupee strengthened to an intraday high of 94.9375 in early trade, supported by dollar sales from state-run banks, likely on behalf of the Reserve Bank of India. However, it quickly reversed course as dollar demand from arbitrage trades and merchant payments gathered pace through the session.

Crypto
Crypto markets rebounded on Thursday as easing inflation concerns and improved macro sentiment supported risk assets, although volatility remained elevated. Bitcoin briefly climbed above $61,000 before settling near $59,600. The broader cryptocurrency market capitalisation rose to about $2.19 trillion, up roughly 3.3% over the past 24 hours, supported by renewed buying interest despite elevated liquidations and shifting stablecoin flows.

Despite the rebound, Bitcoin remains under pressure after falling to around $57,950 earlier this week, its lowest level in nearly 21 months, highlighting continued caution among investors. Ethereum traded in the $1,550-$1,650 range. While the token remains well below its record high, investors continue to view Ethereum favourably over the longer term, supported by its dominant role in blockchain applications and decentralised finance.

US Stock Futures
US stock futures were little changed on Thursday as investors awaited key US employment data that could shape expectations for the Federal Reserve's next policy move. Futures tied to the Dow Jones Industrial Average edged up 23 points, or less than 0.1%, while S&P 500 futures slipped 0.05%. Nasdaq-100 futures underperformed, falling 0.4%.

Trading remained subdued as investors looked ahead to the closely watched US labour market data for fresh clues on the strength of the economy and the outlook for interest rates. The employment figures are expected to play a key role in shaping market expectations for the Federal Reserve's monetary policy path, with traders remaining cautious after recent hawkish signals from policymakers.

US Treasury Notes
US Treasury yields edged higher in premarket trading on Thursday as investors remained cautious ahead of the closely watched June nonfarm payrolls report, which could shape expectations for the Federal Reserve's interest-rate path. The benchmark 10-year Treasury yield rose about 2 basis points to around 4.493%, while the policy-sensitive 2-year Treasury yield climbed to 4.172%.

Bond markets remained range-bound as traders consolidated positions following the sharp sell-off at the end of June. While Fed Chair Kevin Warsh recently indicated that inflation risks had begun to ease, investors continued to price in a higher-for-longer rate outlook. Market participants are now focused on the June employment report, released a day earlier than usual ahead of the US Independence Day holiday, for fresh clues on the strength of the labour market and the Fed's policy trajectory.

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