Dalal Street remained firm in the green during the afternoon, with auto stocks supporting the sentiment, on Wednesday, July 23. The Indian equity benchmarks Nifty 50 and Sensex echoed the positive sentiment across global markets following a trade deal between U.S. and Japan.
Further, despite delays, investors are penciling in a trade deal between US and India, as both governments attempt to ensure progress.
At 12:25 p.m., the Sensex was up 394.91 points or 0.48 percent at 82,581.72, and the Nifty was up 112.80 points or 0.45 percent at 25,173.70. About 1522 shares advanced, 1884 shares declined, and 134 shares were unchanged.
The broader markets extended their losing streak from the previous session, with the Nifty Midcap 100 and Nifty Smallcap 100 lower by 0.3 percent. Volatility in the markets, measured by the India VIX index, sank nearly two percent.
The US-Japan deal, which reduces tariffs on Japanese vehicles entering the US market, lifted the Nifty Auto index. Indian automakers mirrored the global momentum, with Bajaj Auto, Tata Motors, Maruti Suzuki, Mahindra & Mahindra, and Hyundai Motor India gaining up to 3 percent intraday.
The rally was part of a broader trend that saw Japanese auto giants like Toyota, Honda, and Nissan surge on the Tokyo Stock Exchange, pushing the benchmark Nikkei index up by 2 percent.
Further, the Pharma and Bank indices were also trading in the positive zone. On the flip side, the realty index crashed nearly three percent. Shares of real estate majors Lodha Developers and Oberoi Realty saw a large trade of stake worth Rs 3,400 crore in early session, reportedly by global investor Invesco, weighing down the realty index.
On the technical front, the key support is placed at 25,000, and a decisive break below 24,900 could accelerate the downside momentum. "On the upside, resistance is capped at 25,250, with the next hurdle in the 25,300–25,500 zone," said Mandar Bhojane, Senior Technical & Derivative Analyst - Research at Choice Equity Broking.
Given the current market landscape, traders are advised to adopt a cautious 'buy-on-dips' strategy, especially when trading with leverage. Booking partial profits during up-moves and maintaining tight trailing stop-losses will be crucial for effective risk management. Fresh long positions should be considered only if the Nifty sustains above the 25,250 mark, he added.
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