IT Sector Resurgence and Easing Crude Prices Propel Nifty Above 24,100; DIIs Cushion FII Outflows

Market Snapshot

The Indian equity benchmarks, Sensex and Nifty 50, extended their winning run on Thursday, July 2, 2026, closing nearly 0.75% higher. The 30-share BSE Sensex jumped 579.48 points, or 0.75%, to finish at 77,502.12, while the broader NSE Nifty 50 rallied 169.85 points, or 0.71%, to settle at 24,175.70. The market breadth remained firmly positive, with the Nifty IT index emerging as the star performer, surging over 4.6%.

Institutional Flows: Cash Market

Institutional activity on July 2 showed a continuation of the divergent trend between foreign and domestic participants. According to provisional data from the exchanges:

• Foreign Institutional Investors (FIIs): Remained net sellers in the cash segment, offloading equities worth ₹311.82 crore.
• Domestic Institutional Investors (DIIs): Acted as a significant counterbalance, recording a net purchase of ₹1,784.40 crore.

This institutional support was critical in maintaining the market's upward trajectory, especially as global cues remained mixed due to a sell-off in international technology shares.

Derivatives Market Activity

The derivatives segment witnessed significant short-covering, particularly in the IT pack, which had faced pressure in the preceding four sessions. Nifty futures saw an unwinding of call options at the 24,100 and 24,200 levels, indicating that traders were caught off-guard by the strength of the rebound.

• Nifty OI: Open interest data suggests a shift in the support base to 23,800–24,000, while 24,260 remains a stiff immediate resistance.
• Volatility: The India VIX dropped by over 5% to settle near 12.54, its lowest level in over a year, signaling reduced fear among market participants.

Key Drivers and Outlook

The primary catalyst for Thursday's rally was the sharp drop in Brent crude prices, which slid to the $70–$71 per barrel range. This decline followed reports of "positive progress" in indirect talks between the United States and Iran regarding the Strait of Hormuz. Additionally, domestic sentiment was bolstered by:

• IT Sector Rebound: Heavyweights like Infosys (+5.82%), Tech Mahindra (+4.57%), and TCS (+4.45%) led the charge as bargain hunters returned to the sector.
• India-Japan Summit: Landmark initiatives in AI, defense, and energy security signed between PM Narendra Modi and his Japanese counterpart added strategic optimism.
• Macro Cues: Easing US rate hike concerns and a stronger Rupee further supported the bullish case.

Looking ahead, analysts expect the Nifty to consolidate within the 23,800–24,260 range. A decisive breakout above 24,260 could open the doors for the 24,500 level, while sustained DII inflows will be essential to offset any potential spike in foreign selling pressure.

TAGS: FII, DII, Stock Market, Institutional Investors, Nifty, Sensex

Tags: FII DII Stock Market Institutional Investors Nifty Sensex