Sensex Rebounds 400 Points from Low, Nifty Tops 24,400 on Q1 Earnings, FII Inflows

Sensex and Nifty Reverse Early Dip as Bajaj Finance, M&M Deliver

Indian equity markets reversed early losses on Friday, with the S&P BSE Sensex climbing roughly 400 points from its intraday low and the Nifty 50 reclaiming the 24,400 mark. The recovery followed a weak start that had seen the Sensex slip 118 points after opening, driven by cautious sentiment.

The swing higher was powered by a powerful set of quarterly earnings from two heavyweights: non-banking financial company Bajaj Finance and auto major Mahindra & Mahindra. Bajaj Finance shares surged as much as 7% to a 52-week high after reporting a 28% year-on-year rise in consolidated profit for the June quarter, while M&M gained 2.5% following its own positive results. The broader financial and auto sectors advanced around 1% each.

Support also came from external factors. Foreign Institutional Investors (FIIs) turned net buyers of domestic equities worth Rs 3,623.51 crore on Thursday, snapping a four-month outflow streak. Brent crude oil traded nearly 1% lower at $88.16 a barrel, easing import cost pressure. The Indian rupee strengthened 20 paise to 95.30 against the US dollar, and the India VIX volatility gauge fell over 2% to 11.87, signalling improved investor confidence. Asian markets, including South Korea's KOSPI and Japan's Nikkei, provided firm cues, while US markets ended sharply higher overnight.

At around 12:50 pm, the Sensex was up 277.63 points, or 0.36%, at 78,205.78, and the Nifty gained 88.50 points, or 0.36%, to 24,405.65.

Earnings, Flows, and Global Cues: What Drove the Intraday Recovery

Bajaj Finance Delivers a Beat; Financial Stocks Lead

The standout performer was Bajaj Finance, whose stock hit a fresh 52-week high on both the BSE and NSE after its June quarter profit beat street estimates with a 28% advance. The rally in this NBFC heavyweight pulled the entire financial basket higher, reflecting confidence that credit demand and asset quality remain robust. For the market, a large-cap financial beating numbers acts as a sentiment anchor, encouraging buying in the broader index.

Mahindra & Mahindra Adds Auto Sector Firepower

In the auto space, Mahindra & Mahindra’s quarterly performance sparked a 2.5% rise and helped lift the Nifty Auto index by 1%. Combined with Bajaj Finance, these two components provided the lion’s share of the intraday recovery, demonstrating how single-stock earnings can shift the direction of the benchmark indices when the market is searching for a catalyst.

Foreign Flows Return After a Four-Month Drought

Thursday’s FII buying of Rs 3,623.51 crore was a critical psychological pivot. The earlier prolonged selling had weighed on Indian equities. Their return signals that, for now, global funds see value or at least a favourable risk-reward setup, especially with earnings providing justification. Sustained FII interest will be necessary for the market to move beyond the recent choppy range.

Lower Crude and a Stronger Rupee: A Double Tailwind

Brent crude fell below $89, providing respite from imported inflation concerns, while the rupee continued its advance to 95.30 against the dollar. Both factors directly reduce the current account and fiscal headwinds that have plagued Indian markets when oil prices rise, giving a macro cushion that supports valuations.

Investors Shake Off Volatility; VIX Drops

The India VIX retreating below 12 is a clear signal that traders see reduced near-term swings. While the day began with some selling, the rapid bounce and the decline in the fear gauge suggest that the market has absorbed the initial jitters and is now looking for the next leg higher.

The Risks That Still Linger: Iran and Monsoon

Analysts caution that the rally’s sustainability hinges on two major unknowns: whether the geopolitical tensions surrounding Iran will push crude prices beyond the current comfort zone, and whether the Indian monsoon rainfall stays close to long-period averages. As Mayuresh Joshi of William O’Neil told Reuters, markets are awaiting signs that these threats remain contained. Any shock in either front could quickly reverse the gains.

Investor Takeaways as Indices Resume Upside Momentum

For traders and portfolio managers, the session provided several concrete reference points:

• Watch Nifty levels. Geojit’s Anand James flagged 24,367 and 24,530 as the immediate peaks to beat, with downside support at 24,270. A close above 24,530 would suggest momentum carries into next week, potentially testing the upper Bollinger band.
• Monitor FII flow data daily. Thursday’s Rs 3,624 crore inflow was the first major infusion after months. If the trend continues in the coming sessions, it could provide the liquidity needed for a breakout. A reversal to even modest selling would be a red flag.
• Keep an eye on crude oil. Brent crude trading below $89 is supportive, but any escalation tied to Iran could spike prices. With the rupee responsive to oil, a sharp oil rise would hit both the currency and equity sentiment.
• Earnings season still has firepower. Bajaj Finance and M&M showed that Q1 beats can rescue a session. Upcoming heavyweight results (especially in banking and IT) will either cement the gains or set the index back.