Sensex, Nifty rebound June 2 as Nifty IT surges 4%

Market snap: a sharp intraday turnaround

Benchmark Indian equity indices Sensex and Nifty recovered strongly on Tuesday, rebounding from their lowest levels in nearly two months as investors returned to beaten-down large-cap stocks. Early losses were pared steadily, with the session ending in the green after a late push led by technology shares. The recovery came as traders cited value buying at lower levels, easing crude prices, and improved comfort on volatility.

The move also broke the tone of a market that had been on course for a fifth consecutive session of losses, prompting what market participants described as bottom fishing and short covering into the close. Alongside the frontline rebound, investors tracked developments around India-US trade negotiations and global cues for technology and AI-linked stocks.

How the rebound unfolded through the day

The benchmarks started weak, with both indices sliding in early trade as risk appetite remained cautious. As the session progressed, bargain-hunting emerged in select heavyweights and in sectors that had seen recent corrections. By afternoon, the tone improved further as IT stocks accelerated and crude prices eased, helping indices claw back losses.

A key driver was the market’s rotation back into large-cap names at lower levels. The rebound was also supported by derivatives positioning on weekly expiry day, with market watchers pointing to short covering adding to the momentum.

Technology takes the lead

Technology stocks were the biggest drivers of the rebound. Indian IT stocks led the market’s afternoon recovery, with Nifty IT surging over 4%, the top sectoral gainer of the session. In comparison, Nifty50 rose 0.58% to 23,519.3.

The IT rally extended for a third straight day, supported by value buying at lower levels and a recent bullish note by brokerage firm CLSA, according to the report. The broader narrative remained linked to expectations that global software demand will hold up, even with macro uncertainty.

AI spending optimism and global tech cues

The gains were accompanied by continued optimism around global artificial intelligence spending and hopes that demand for software services will remain strong. Buying also mirrored a global rally in technology and AI-linked shares after US-based AI data cloud company Snowflake flagged a robust outlook and cloud expansion plans, which revived confidence in corporate technology demand.

For Indian IT companies, which earn a large share of revenues in overseas markets, sentiment was also supported by currency moves. The report noted that IT shares tend to benefit when the rupee weakens because many contracts are dollar-linked.

Crude oil eases, supporting sentiment

Crude prices moved lower during the session, helping reduce pressure on India’s inflation and import-bill concerns. Brent crude fell about 1.6% to $13.47, and later in afternoon trade ICE Brent crude futures were down 1.62% at $13.44 per barrel.

Oil prices eased after US President Donald Trump said talks with Iran were ongoing, even as Iran’s Tasnim news agency reported that Tehran had suspended indirect negotiations with Washington. Separately, the report cited CNN-News18 claiming Iran had allowed Indian-flagged tankers to pass through the Strait of Hormuz, while Reuters reported an Iranian source denied allowing the tankers to pass. These headlines kept markets sensitive to energy supply risks even as prices cooled.

India VIX cools as risk appetite improves

Volatility indicators also turned supportive. India VIX eased 7% to 15.36 on June 2, suggesting buyers were finding comfort at lower levels. The easing in the “fear gauge” typically aligns with improving near-term risk appetite, which can help stabilize intraday flows when markets are recovering from sharp declines.

Trade talks in focus: June 2-4 meetings

Markets also tracked India-US trade negotiations. The report said investors were hopeful of a positive outcome, with meetings scheduled for June 2, 3, and 4. India is seeking relief from tariffs linked to US trade investigations, according to reports.

Kranthi Bathini, equity strategist at WealthMills Securities, said the market was anticipating positive news on the India-US trade deal front, given that a US delegation was in India. Trade-related headlines added a sentiment tailwind alongside the sector-led move in IT.

Rupee weakens, with implications for IT exporters

The report noted that the Indian rupee depreciated 31 paise to 92.32 per US dollar in early trade, pressured by foreign fund outflows, higher crude oil prices, and a stronger dollar amid tensions in West Asia. While a weaker rupee can be a macro headwind, it can support earnings visibility for export-heavy IT companies, which contributed to the sector’s relative strength during the rebound.

Technical levels investors are watching

Anand James, Chief Market Strategist at Geojit Investments Limited, said the steep fall in the previous session left room for recovery attempts. He added that the Nifty needs to move above 23,990 to sustain the rebound. On the downside, he flagged that a fall below 23,697 could expose the index to the 23,550–23,370 zone.

These levels became part of the day’s narrative as the market shifted from early selling pressure to a recovery attempt supported by sector leadership.

Key movers and data table

Buying was reported in index heavyweight Reliance Industries, which was up more than 1%. In addition, electricity shares gained traction amid gas shortage fears, with Coal India and Power Grid among top Nifty50 gainers, rising up to 4%.

What this rebound signals for investors

The day’s recovery underlined how quickly sentiment can shift when multiple supports line up: value buying at lower levels, a fall in crude, easing volatility, and a sectoral surge in IT. The market also showed sensitivity to policy and macro headlines, including updates around trade negotiations and geopolitics-linked oil risks.

In the near term, investors are likely to track the scheduled India-US trade meetings and the market’s ability to hold above the technical levels highlighted by strategists. Sector leadership from IT, alongside moves in crude and the rupee, remains central to how traders frame the next sessions.