Indian Markets Rebound on IT Rally After Volatile Session

Indian equity markets experienced significant volatility between August 27 and August 28, 2026. The BSE Sensex and NSE Nifty initially opened higher on Thursday due to strong earnings from Nvidia, but quickly declined as selling pressure hit auto, cement, and blue-chip stocks like HDFC Bank. By Thursday's close, the Sensex dropped 539 points to 76,933 and the Nifty slid 116 points to 24,090, weighed down by geopolitical uncertainty surrounding the Strait of Hormuz and derivatives expiry volatility.

Volatility intensified on August 28, when the Sensex suffered a brief 3% plunge during a 20-minute closing auction, sparking scrutiny of the auction-based pricing mechanism. Simultaneously, HDFC Bank shares hit a two-year low amid uncertainty regarding CEO Sashidhar Jagdishan's tenure, while Zerodha founder Nithin Kamath warned that the industry-wide margin trading facility book had reached a "scary" 1.4 trillion rupees.

Markets rebounded on Friday, driven by a surge in information technology stocks. The Nifty IT index jumped nearly 3 percent, fueled by Nvidia's robust results and global AI optimism. This sectoral strength pushed the Sensex up 330.91 points to 77,264.51 and the Nifty to 24,175.65. Despite the recovery, investors remained cautious ahead of Federal Reserve Chair Kevin Warsh's keynote address at the Jackson Hole Symposium for guidance on interest rates and inflation policy.