Sensex jumps 700 points: 3 reasons why the stock market is rising today

Dalal Street continued its winning streak as indices rallied in early trade on Wednesday, with the Sensex gaining over 700 points and the Nifty reclaiming the 24,150 mark, as investors cheered another strong session for IT stocks while awaiting the US Federal Reserve's policy decision.The BSE Sensex rose 711 points to 77,477.25, while the Nifty50 climbed over 200 points to 24,186.30. Gains were broad-based, with 13 of the 16 sectoral indices trading in positive territory.Here's what's driving today's rally.IT STOCKS CONTINUE TO LEAD THE MARKETInformation technology stocks extended Tuesday's rally, providing the biggest support to benchmark indices. The Nifty IT index gained nearly 2%, taking its three-session advance to around 8%. Coforge climbed over 3%, while OFSS gained nearly 3%. Infosys rose close to 3%, Persistent Systems added over 2%, LTIMindtree gained nearly 2%, and TCS, HCLTech and Tech Mahindra also traded firmly higher.The sector has emerged as a relative outperformer even as technology shares across South Korea, Japan and Taiwan have come under pressure. The reason is the same trend that supported IT stocks on Tuesday.For months, Indian IT companies were criticised for "missing the AI bus" because they lacked exposure to AI chip manufacturing and expensive AI infrastructure. That very weakness is now working in their favour.As investors sell AI-linked semiconductor and hardware companies over concerns about high capital expenditure, stretched valuations and uncertain returns, they are rotating into Indian IT companies, which follow an asset-light services model and have relatively little exposure to the AI infrastructure spending cycle.INVESTORS AWAIT THE FED'S POLICY DECISIONAnother key trigger is the US Federal Reserve's interest rate decision due later on Wednesday.Markets largely expect the Fed to leave interest rates unchanged. Investors, however, will closely monitor Chair Jerome Powell's comments for clues on future policy moves amid persistent inflation concerns.Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said a status quo has already been priced into markets."The Fed's expected policy of holding rates is unlikely to impact the Indian market since it is already discounted by the market. However, if the Fed goes for a surprise early rate hike, that will have slightly negative implications for Indian markets as rising US bond yields could divert FII flows towards US bonds," he said.He also noted that the sharp correction in South Korean chip stocks has become "an advantage for India" by improving the relative attractiveness of Indian IT companies.BROAD-BASED BUYING LIFTS SENTIMENTApart from IT, buying was visible across several sectors.FMCG, Metal, Auto, Financial Services and Consumer Durables traded in positive territory, while broader markets also advanced. The Nifty Midcap 100 gained nearly 0.5% and the Smallcap 100 rose over 0.5%, suggesting participation beyond frontline stocks.India VIX fell about 1.5%, indicating easing volatility despite geopolitical concerns.Crude oil prices rebounded more than 4% after reports of joint US-Saudi strikes in Iraq raised concerns over supply disruptions. While higher crude prices typically weigh on India, investors appeared more focused on corporate earnings, the continued strength in IT stocks and expectations that the Fed will keep interest rates unchanged.Vijayakumar said the market's range-bound phase could eventually break higher, though sustained foreign institutional buying would depend on greater clarity over crude oil prices and the progress of the monsoon.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsPublished On: Jul 29, 2026 09:46 IST