Sensex, Nifty settle higher for 2nd day ahead of Fed decision; PSU bank, auto shares gain

Sensex, Nifty gain in September 17 trade. 

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The equity benchmarks Sensex and Nifty settled higher for the second straight session on Wednesday, led by gains in public sector banks and auto stocks, ahead of the US Federal Reserve’s policy outcome.

Investor sentiment was also supported by bilateral trade talks on Tuesday with a visiting US delegation, where both sides agreed to push for an early conclusion of a trade pact.

Sensex edged higher by 313.02 points or 0.38 percent to settle at 82,693.71. During the day, it jumped 361.26 points or 0.43 percent to 82,741.95. The Nifty climbed 91.15 points or 0.36 percent to 25,330.25.

State Bank of India, Bharat Electronics, Kotak Mahindra Bank, Maruti, Trent and UltraTech Cement were the major gainers.

Shares of state-run lenders extended their rally for a third session after a senior finance ministry official said the government would retain majority ownership in public sector banks. Bank of Maharashtra, Indian Bank and Punjab National Bank were among the major gainers.

PSU Bank stocks rise for 3rd day: BoM, Indian Bank, PNB gain amid DFS Secy's remark on minimum shareholding

Auto, oil & gas, IT and realty indices also moved higher, rising up to 1 percent.

On the other hand, FMCG, metal, pharma and consumer durables stocks witnessed selling pressure. Britannia Industries, Jindal Steel, Whirlpool of India and Gland Pharma fell up to 2 percent.

Vinod Nair, Head of Research, Geojit Investments, noted "Indian equities maintained their upward momentum, aided by the revival of India–US trade talks and efforts to strengthen bilateral ties. A stable INR added to investor confidence, while global markets traded cautiously ahead of the US Fed’s FOMC decision. Domestically, equities remained in risk-on mode, supported by expectations of a rate cut and improving macro fundamentals. Strong domestic inflows, currency stability, and favourable geopolitical dynamics continue to create a constructive near-term outlook for the market."

In the broader market, both midcap and smallcap indices advanced. The Nifty Smallcap 100 gained 0.7 percent, while the Nifty Midcap 100 inched up marginally.

Among other gainers in the midcap segment were KPIT Technologies, Cochin Shipyard, Bank of Maharashtra and Aditya Birla Fashion and Retail, rising up to 4 percent.

In the smallcap space, Garden Reach Shipbuilders & Engineers, IFCI, Zen Technologies and Data Patterns (India) advanced up to 7 percent.

Rupak De, Senior Technical Analyst at LKP Securities, noted "The Nifty continues to sustain above the previous swing high, supported by follow-up buying. Market sentiment has improved significantly, with the panic index slipping by 10 during the day, reflecting growing investor confidence. Going forward, the trend is likely to remain positive as long as the Nifty holds above the 21EMA, which is currently placed just above 24,900. On the higher side, resistance is seen at 25,400 and 25,500. A decisive move above 25,500 could lead to an additional rally of 400–500 points."

In Asian markets, Shanghai's SSE Composite index and Hong Kong's Hang Seng settled in positive territory while South Korea's Kospi and Japan's Nikkei 225 index ended lower. Markets in Europe were trading mostly higher.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.