Sensex Rises 70 Pts, Nifty IT Sinks 3% as FII Inflows Hit ₹7,360 Cr

For investors tracking cross-asset flows, today's session reveals a clear narrative: foreign capital is returning to India just as global tech volatility spikes. The sharp 3% slide in Nifty IT, contrasted with nearly 1% gains in financial services and pharma, underscores a rotation driven by risk aversion to highly valued, export-oriented sectors. With FIIs injecting ₹7,360 crore over three days and Brent crude sliding to $85.27, the macro setup is increasingly favorable for domestic-facing cyclical stocks—offering a potential tactical reallocation opportunity for portfolio managers.

Indian equity markets opened higher on July 31, 2026, with the BSE Sensex and NSE Nifty50 both advancing, driven by robust gains in financial services, pharmaceuticals, and auto stocks. The Sensex commenced trading at 77,998.66, up 70.51 points or 0.09%, while the Nifty50 added 44.30 points or 0.18% to reach 24,361.45. The positive start was underpinned by a favorable global backdrop and sustained foreign institutional investor (FII) inflows into domestic equities. However, the session was marked by extreme sectoral divergence, with technology stocks suffering heavy losses while domestic-oriented cyclical sectors rallied.

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In South Korea, the Kospi index swung violently, initially surging 16% in early trading, propelled by a 25% spike in Samsung Electronics and a 21% surge in SK Hynix.

Sectoral indices painted a stark contrast. The Nifty Financial Services Ex-Bank index surged nearly 1% to lead the gainers, followed by Nifty Pharma, Nifty Auto, Nifty Healthcare, Nifty Metal and Nifty PSU Bank, each posting gains of up to 0.8%. In sharp contrast, the Nifty IT index plunged 3% in early trade, making it the worst performer by a wide margin. The Nifty MidSmall IT & Telecom index also fell 1.41%, and even the defensive FMCG sector slipped 0.17%. This rotation out of technology and into domestic cyclical and defensive plays was a direct response to heightened global volatility, particularly in the US and South Korean tech sectors.

Analysts noted that global equity markets have entered a phase of exceptional turbulence, especially in technology stocks. In South Korea, the Kospi index swung violently, initially surging 16% in early trading, propelled by a 25% spike in Samsung Electronics and a 21% surge in SK Hynix. Together these two stocks account for 52% of Kospi's market capitalization. Such double-digit moves at the index level, while partly reflecting quarterly earnings reactions and speculative flows, have raised concerns among institutional investors regarding stability and contagion risks. The analysts remarked that this kind of excess volatility could drive caution and a possible shift toward more stable markets like India.

This assertion was supported by the remark that "India is a stable market and the downside risks are limited now, particularly in largecaps where valuations are fair and growth prospects are good." This sentiment was echoed by the return of FIIs, who turned net buyers over the last three trading sessions, purchasing equities worth a cumulative Rs 7,360 crore. This influx of foreign capital after a period of selling signals renewed confidence in India's macroeconomic resilience and corporate earnings trajectory, especially in sectors like banking, pharma, and auto that are less exposed to global tech-centric volatility.