The IT index rose nearly 4% on July 2, snapping a four session losing streak where it fell 6.5% due to concerns over the US Federal Reserve hiking interest rates later this year. An analyst said today's bounce might have more to it than just value buying.

The AI trade in South Korea is weakening, as indicated by the Kospi index's 11.5% correction last month, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, flagging that this is a positive development for non-AI markets like India.

As a result of four positive trends Nifty is outperforming other markets now. For June, Nifty is up 2.5% while Kospi and Nasdaq are down 11.5% and 3% respectively, he said.

"There are some positive trends that are providing near-term support and strength to the market. One, crude continues to fall with Brent below $71 now. This will further strengthen India’s macros and help in achieving higher growth while keeping inflation in check. Two, the auto sales numbers in June was strong with 24.1% growth in passenger vehicles. This Indicates that the demand momentum in the economy continues to be strong.

"Third, the AI trade in South Korea is weakening as indicated by the 11.5% correction in Kospi last month. This is positive for non-AI markets like India. Fourth, the FII selling is tapering off giving an upper hand to the DIIs. As a result of these positive trends Nifty is outperforming other markets now. For June, Nifty is up 2.5% while Kospi and Nasdaq are down 11.5% and 3% respectively. Whether India’s outperformance will continue or not will be determined to a large extent by the progress of the monsoon, which continues to be unsatisfactory. The strength in the banking segment and digital platform companies is likely to continue in anticipation of good Q1 results," said Vijayakumar.

At 10:28 am, the Sensex was up 317.08 points or 0.41% at 77,239.72, and the Nifty was up 101.80 points or 0.42% at 24,107.65. About 2,301 shares advanced, 1,162 shares declined, and 179 shares were unchanged.

The Nifty IT index was up nearly 4% with all its constituents rising. Shares of most domestic information technology stocks rose despite the global tech sell-off. Infosys was the top performer in the Nifty 50 index, up over 5%. It was followed by HCL Technologies, Tata Consultancy Services, Tech Mahindra, and Wipro, up 1.5-3.5%.

In the Nifty 200 universe, Coforge and Mphasis rose over 4% each. Persistent Systems and LTM were up over 3%. Among Nifty 500 stocks, Sonata Software was the biggest gainer, up almost 10%.

FPIs offloaded Rs 1,141 crore worth of shares on Wednesday, as per provisional data. On the other hand, domestic institutional investors continued to support the market with inflows worth Rs 3,159 crore.