The benchmark equity indices settled lower for the third consecutive session on September 23, however, the Sensex and Nifty trimmed most of their early losses, as buying in banking and auto shares lifted investor sentiment on the day of weekly derivatives expiry.
After oscillating between gains and losses during the day, the Sensex closed lower by 57.87 points or 0.07 percent at 82,102.10. During the day, it hit a high of 82,370.38 and a low of 81,776.53, fluctuating by 593.85 points. The Nifty dipped 32.85 points or 0.13 percent to 25,169.50.
JSW Steel, IndusInd Bank and Bajaj Finance led the recovery, rising up to 3 percent, while Trent and UltraTech Cement were among the major laggards.
Three key factors aided the recovery
1) Hopes of further rate cuts: Global markets drew support from dovish remarks by US Federal Reserve Governor Stephen Miran, who said the Fed funds rate remains higher than warranted under the Taylor rule approach. He suggested the rate should be closer to 2–2.5 percent against the current 4–4.25 percent, even after last week’s cut. According to CME FedWatch, nearly 90 percent of traders are pricing in a 25-basis-point cut at the Fed’s October meeting, with a three-fourths probability of a deeper cut in December.
2) Positive global cues: Asian markets traded firm, with South Korea’s Kospi in the green, while US stock futures pointed to a higher opening on Wall Street. Firm trends in overseas markets generally improve risk appetite among domestic investors.
3) Buying in banking and auto stocks: The Nifty Auto index advanced nearly 1.5 percent on sustained demand for two- and four-wheelers, with gains led by Maruti Suzuki, Eicher Motors, Tata Motors, Mahindra & Mahindra, Hero MotoCorp and Bajaj Finance. Bank stocks also saw strong buying post-noon, helping drive the broader market recovery.
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