Indian equity markets staged a recovery on Tuesday after a weak start, with both benchmark indices ending in the green. The Sensex settled at 74,649.84, gaining 382 points over the previous close, while the Nifty50 climbed 101 points to finish at 23,483.55. The recovery came a day after both indices took a sharp hit on June 1, when the Sensex had shed 508 points and the Nifty had slipped 165 points to close at 23,382.

IT Stocks Lead the Charge

Tuesday's rebound was driven largely by information technology shares, which saw strong buying interest across the board. On the National Stock Exchange, Nifty IT emerged as the top sectoral gainer, surging 4.25% by close. Most other sectoral indices also ended in positive territory. Nifty Pharma, Financial Services, and a handful of other segments were exceptions, closing with marginal losses even as broader sentiment turned positive through the session.

South Korea Leapfrogs India

Away from the trading floors, a significant shift in the global pecking order drew attention. South Korea's stock market has overtaken India to become the world's sixth-largest by total market capitalisation. According to Bloomberg data, the combined market cap of South Korean listed companies has surged 86% this year to reach $5 trillion, roughly ₹475 lakh crore.

India's market cap, by contrast, has slipped to around $4.8 trillion, or approximately ₹456 lakh crore. The Korean surge has been led in large part by its heavyweight semiconductor companies, which have been riding a sustained wave of global demand for artificial intelligence infrastructure. Earlier this year, Taiwan had already moved ahead of India on the same measure, making South Korea the second Asian market to do so in quick succession.

Asian Markets See Mixed Trade

The mood across Asian markets on Tuesday was uneven. South Korea's KOSPI fell 154 points, or 1.45%, to 8,634, even as the country's overall market cap milestone drew attention. Japan's Nikkei dropped sharply by 1,101 points, or 1.64%, to close at 65,833. Hong Kong's Hang Seng bucked the trend, gaining 242 points — up 0.97% — to end at 25,641.

Wall Street Closed on a Positive Note

US markets provided a stable backdrop heading into Tuesday's session. The Dow Jones Industrial Average added 46 points to close at 51,079, while the Nasdaq rose 114 points to 27,087. The S&P 500 gained 20 points, finishing at 7,600. The mild but consistent gains on Wall Street offered some reassurance to domestic investors navigating a volatile stretch.

FIIs Continue to Pull Out

Institutional flow data continued to reflect a cautious foreign investor stance. Foreign institutional investors net sold shares worth ₹3,912 crore in Tuesday's session. Over the past seven days, net FII outflows stand at ₹26,060 crore, and over the last 30 days the figure has climbed to nearly ₹59,875 crore — close to ₹60,000 crore in a single month.

Domestic institutional investors have been absorbing much of that pressure. DIIs bought shares worth ₹5,109 crore on Tuesday, with net purchases totalling ₹25,694 crore over the past week and ₹87,778 crore over the past month, providing a significant cushion against foreign outflows.

What to Watch Next

With South Korea and Taiwan both now ahead of India by market cap, attention will likely turn to whether a sustained recovery in IT and other export-linked sectors can help domestic markets regain ground. The near-term trajectory will depend on global cues, the pace of FII outflows, and upcoming macro data. For now, Tuesday's rebound offered some relief after a rough Monday, though the broader picture remains one of cautious consolidation.

Dalal Street Cheers Modi-Trump Call
Sensex roars 1,300 points; Nifty jumps nearly 400 on Hormuz Strait, trade talks

Indian benchmark indices surged sharply in early trade on Wednesday, propelled by a key phone conversation between Prime Minister Narendra Modi and US President Donald Trump. Sensex rocketed 1,300 points at open, while Nifty climbed almost 400 points.

Markets reacted to the leaders' focus on keeping the Strait of Hormuz open amid Iran tensions and hints of an impending India-US trade deal.

Leaders Discuss Key Issues

Prime Minister Modi and President Trump spoke for 40 minutes on Tuesday evening. Sources indicated the call covered the Iran conflict and stressed uninterrupted navigation through the Strait of Hormuz.

PM Modi shared details on social media, highlighting the productive exchange. Trading opened buoyant as investors cheered the positive tone.

Sensex Opens Strong

The BSE Sensex leaped to around 25,000 levels in initial deals, up 1,300 points from Tuesday's close. Major gainers included IndiGo, HCL Tech, Infosys, UltraTech Cement, Bajaj Finance and Larsen & Toubro.

Nifty mirrored the rally, gaining nearly 400 points to hover above 24,200. Broad-based buying swept across counters.

Nifty IT Leads Gains

Sectoral indices shone brightly on the NSE. Nifty IT topped with a 2.93% jump, followed by PSU Bank, Metal and Realty sectors.

All major indices advanced at open. The rally erased Monday's losses, when Sensex had shed 702 points and Nifty 208 points to end at 23,842.65.

Ambassador Hints Trade Deal

US Ambassador to India Sergio Gor termed the Modi-Trump call "a very positive and productive" discussion. He added, "Stay tuned," signaling possible announcements on the long-awaited India-US trade deal soon.

Officials confirmed the envoy's remarks aligned with ongoing negotiations. Markets interpreted this as a bullish trigger.

Global Markets Align

Asian bourses advanced in tandem. South Korea's Kospi rose 3.14% to 6,155, Japan's Nikkei gained 0.49% at 58,163, and Hong Kong's Hang Seng climbed 0.82% to 26,094.

US indices closed higher overnight, with Nasdaq up 1.96%, Dow Jones 0.66% and S&P 500 1.18%. Positive overseas cues fueled Dalal Street's momentum.

Impact on Investors

The surge boosted investor sentiment amid geopolitical worries. IT and banking stocks drew heavy buying as trade deal hopes resurfaced. Analysts see this lifting foreign inflows into Indian equities.

Retail and institutional players piled in early, pushing turnover higher. Broader economy stands to gain from stable trade ties.

What Lies Ahead

Traders eye follow-up developments on the trade pact and Hormuz situation. Any formal deal announcement could sustain the rally, per market experts.