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The Indian stock market saw healthy buying interest in the morning session on Wednesday, February 25, largely due to short covering amid positive global cues.

The Sensex jumped over 700 points to an intraday high of 82,958, while the Nifty 50 reclaimed the 25,650 mark, rising by almost 1%.

The mid and small-cap indices also rose more than half a per cent each, reflecting broad-based buying in the domestic market.

The overall market capitalisation of BSE-listed firms jumped to ₹469 lakh crore from nearly ₹466 lakh crore in the previous session, making investors richer by ₹3 lakh crore in a session.

The Indian stock market has been witnessing sharp volatility this year. Volatility index, India VIX, has surged nearly 40% this year so far, indicating heightened nervousness among market participants.

The 9–12 range is considered the lower band of the India VIX, while the normal range for the fear gauge is around 12-15. This is the range in which the market has enough triggers to move either up or down, though not necessarily with extreme volatility.

Among key themes are the volatility in the IT sector and FII buying in the cash segment.

"There are two significant trends in the market - one negative, the other positive - which will have a bearing on how the market moves in the near-term. The negative factor is the continued weakness in IT stocks triggered by the Anthropic shock. The positive factor is the FIIs turning buyers in February after a long time," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, noted.

Let's take a look at the five key themes in detail:

Let's take a look at five key factors that dominate the domestic market

Noise surrounding how AI will impact the IT sector is keeping market participants busy. Global tech stocks have been experiencing sharp volatility of late amid the narrative that AI will significantly disrupt IT services.

The Nifty IT index, after crashing 5% in the previous session, jumped 3% in morning trade on Wednesday after a recovery in the US tech stocks after Anthropic announced partnerships with several SaaS companies, including Salesforce, signalling the AI company will work alongside software providers rather than disrupt or replace them.

Tech-heavy index Nasdaq jumped more than 1% on Tuesday. IBM's stock price, which saw the biggest single-day fall since October 2000 on Monday, rose more than 5% on Tuesday.

"Many leading IT names have crashed between 18%-26% in the last month alone. Sustained selling in IT stocks may be over, and there is a possibility of some rebound in the segment. News of Anthropic’s Claude chatbot building partnerships in software and services with IT firms indicates that there will be collaboration opportunities for Indian IT firms," said Vijayakumar.

(This is a developing story. Please check back for fresh updates.)

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.Nishant, Principal Correspondent – Markets for Livemint, and has been tracking India’s stock markets and economy for a decade. Prior to Mint, he has w...

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