The benchmark equity indices rebounded on Thursday, led by gains in metal, pharma and IT shares, while sustained foreign fund inflows and firm global cues supported investor sentiment.
Sensex settled higher by 398.45 points or 0.49 percent at 82,172.10, while the broader Nifty finished at 25,181.80, up 135.65 points or 0.54 percent.
Tata Steel, JSW Steel, Dr. Reddy's Laboratories, HCL Technologies and InterGlobe Aviation were among the key gainers, rising up to 3 percent intraday. About 1698 shares advanced, 1925 shares declined, and 155 shares unchanged.
Key factors behind market rise
1) FII buying for 2nd consecutive session: Foreign Institutional Investors (FIIs) were net buyers in the capital market for the second straight session. According to exchange data, FIIs bought equities worth Rs 81.28 crore on Wednesday, after making net purchases of Rs 1,440.66 crore on Tuesday.
2) Strong buying in key sectors: Metal and pharma stocks led the rally. The Nifty Metal index climbed 1.6 percent, snapping a three-day losing streak, as base metal prices strengthened amid supply concerns from major mines, including Freeport’s Grasberg mine in Indonesia.
Pharma shares rose up to 4 percent following reports that the US administration is not planning to impose tariffs on generic drugs, a development seen as positive for Indian pharmaceutical exporters.
3) Hopes of earnings rebound: Investor sentiment remained supported by expectations of an earnings rebound. Tata Consultancy Services (TCS) will open the Q2 earnings season later in the day with its September quarter results.
"The results season starting today will be closely tracked by investors. While IT stocks have recovered somewhat, the headwinds remain strong. Q2 earnings may stay modest, but improving demand for automobiles and consumer electronics could drive growth from Q3 onwards," said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
4) Positive global cues: Global cues were largely positive, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng indices trading higher. US markets ended mostly firm overnight, and futures indicated a positive opening on Wall Street.
5) Crude declines: Brent crude prices fell 0.5 percent to USD 65.92 a barrel, easing concerns over import costs and inflationary pressure in India.
6) Positive cues from Fed minutes: Minutes from the latest US Federal Reserve meeting indicated a strong inclination among officials to cut interest rates further this year, citing weakness in the labour market. Expectations of lower US rates tend to support emerging markets like India by improving foreign fund flows.
Market outlook
Anand James, Chief Market Strategist at Geojit Financial Services, said, "The anticipated slippages to 25,030–25,000 have matured, and a swing higher is in order. However, unless Nifty rises directly above the 25,182–25,225 region, bears may regroup for another leg down towards 24,982. Alternatively, if the 25,200 region is conquered, look for 25,460."
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.
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