Sensex, Nifty extend gains as dovish Fed bets fuel rally; IT stocks lead the charge

Dalal Street rides on Fed optimism

Indian benchmark indices Sensex and Nifty held firm in positive territory during the afternoon session on August 25 as expectations of a US Federal Reserve rate cut fueled bullish sentiment across global markets. Broad-based buying dominated trade, led by IT and metal stocks, which outperformed the benchmarks.

Around noon, the Sensex was higher by 323.54 points, or 0.40 percent, at 81,630.39, while the Nifty gained 97.00 points, or 0.39 percent, to trade at 24,967.10. Market breadth remained evenly poised with 1,877 stocks advancing, 1,762 declining, and 156 unchanged.

The broader markets supported the uptrend as midcap and smallcap indices rose up to 0.4 percent. Meanwhile, India VIX jumped 2 percent, hinting at near-term uncertainty ahead of the August 27 double tariff implementation.

The spotlight remained on IT stocks, which rallied on hopes of a dovish Fed. Traders now expect a 25 basis points rate cut at the Fed’s September 16-17 meeting. Adding to the optimism, JPMorgan upgraded TCS to ‘overweight’ from ‘neutral’ and raised its target price to Rs 3,800 per share.

Metal counters also shone, with stocks like JSW Steel, Tata Steel, Coal India, and Hindustan Zinc gaining up to 1 percent during noon deals.

On the other hand, profit-taking weighed on Nifty Media, which fell over a percent, while Nifty Oil & Gas and Nifty Infra also traded in the red.

Analysts at ICICI Securities expect volatility to increase in the truncated week ahead due to tariff developments (August 27 deadline), monthly expiry, and GDP data. They advised focusing on quality names with strong earnings that are positioned to benefit from next-generation GST reforms and festive demand, noting strong support for Nifty in the 24,700–24,500 zone.