Nifty, Sensex rally as better-than-expected US job data eases recessionary fears; India VIX down 7%

Eicher Motors, ONGC, LTIMindtree, Tech Mahindra and HCL Tech were among the major gainers on the Nifty,

Bulls were back in action as benchmark indices Nifty and Sensex notched higher after the new US labour market data boosted investors' confidence following a sharp market sell-off earlier in the week.

At about 9:20 am,  the Sensex was up 797.78 points or 1 percent at 79,684.00, and the Nifty was up 240 points or 1 percent at 24,357. About 2,095 shares advanced, 361 shares declined, and 96 shares unchanged.

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"Nifty Bulls are hopeful for a double-rate cut in the US this September, with optimism buoyed by Wall Street gains, better-than-expected US jobless claims, and a sharp drop in the US VIX.," Prashanth Tapse, Senior Vice President of Research at Mehta Equities, said.

As for the broader market, the mid and smallcap index slightly underperformed the headline indices after rising 0.83 and 0.88 percent, respectively. Even as market experts highlight stretched valuations, the two indices continue to show resilience and have also outperformed the Nifty and Sensex on a year-to-date basis.

Read: Eicher Motors' Q1 performance exceeds expectations but isn't enough to convince all brokerages

India VIX, also took a much-needed breather as it slowed down 7 percent to be at 15.5 levels. The volatility index is a reliable and sound indicator of market anxiety and fluctuations. Earlier in the week, India's VIX shot up over 52 percent in a single day, marking a 9-year high.

Among stocks, Eicher Motors was buzzing in trade following its Q1 earnings. While the result was better than expected, analysts seem mixed on the counter over its prospects. The shares were trading over 4 percent higher Rs 4,740.

Read more: S&P 500 clocks best day since November 2022 on US jobless data, Asia tracks Wall Street higher

As for the sectoral indices, Nifty IT was the brightest spark on the bourses, rising almost 2 percent backed by gains in Tech Mahindra, HCL Tech, and LTIMindtree. Nifty Auto, Metal, Energy and Infra followed, rising over one percent each. All other sectors also edged higher.

"Nifty could stay in the 23894-24343 band for the near term. A breach of 24343 could take the Nifty gradually to 24687. Volumes continue to be a worry even as the participation in the broader markets remains limited," Deepak Jasani, Head of Retail Research at HDFC Securities, said.

Eicher Motors, ONGC, LTIMindtree, Tech Mahindra and HCL Tech were among the major gainers on the Nifty, while losers were BPCL and HDFC Life.

"Nifty can find support at 24,150 followed by 24,100 and 24,000. On the higher side, 24,400 can be an immediate resistance, followed by 24,450 and 24,500," says Hardik Matali, Research Analyst at Choice Broking. "The charts of Bank Nifty indicate that it may get support at 50,100, followed by 50,000 and 49,800. If the index advances further, 50,400 would be the initial key resistance, followed by 50,500 and 50,700," he added.

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