Sensex settles 850 pts higher, Nifty at 3-month high: Strong Nestle India, Axis Bank Q2 results among key reasons behind market rally

Sensex, Nifty rise amid buying in shares. 

The benchmark equity indices settled sharply higher on Thursday, led by gains in banking shares and positive global cues amid expectations of a US Federal Reserve rate cut.

Sensex jumped 862.23 points or 1.04 percent to settle at 83,467.66. During the day, it zoomed 1,010.05 points or 1.22 percent to 83,615.48. The Nifty surged 261.75 points or 1.03 percent to 25,585.30.

Titan Company, Adani Ports and Special Economic Zone, Tata Motors, Axis Bank and Mahindra & Mahindra were among the top gainers in the Nifty pack, rising up to 3 percent intraday.

Key factors behind market rally 

1) Rise in Bank shares: Banking shares drove the uptrend, with the Bank Nifty recovering from the previous session’s losses to rise half a per cent. Strong buying interest was seen in Axis Bank, AU Small Finance Bank among others.

Axis Bank’s stock advanced after the lender reported healthy loan growth in the September quarter. Brokerage firm Bernstein maintained its ‘outperform’ rating on the stock with a target price of Rs 1,250 per share.

Reports of a possible public sector bank consolidation also buoyed sentiment in the sector. Government sources indicated that the Centre is working on a mega merger plan that may see smaller lenders combined with larger public sector banks.

Govt draws up mega bank merger plan; smaller lenders to be clubbed with big banks by FY27

2) FII inflows: Foreign Institutional Investors (FIIs) bought equities worth Rs 68.64 crore on Wednesday, while Domestic Institutional Investors (DIIs) purchased shares worth Rs 4,650.08 crore. Steady foreign inflows help strengthen the rupee and improve liquidity, supporting equity valuations.

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3) Positive Global market cues: Most Asian markets traded higher, tracking overnight gains on Wall Street. South Korea’s Kospi, Japan’s Nikkei 225 and Shanghai’s SSE Composite were in the green.

"Bullish euphoria is set to light up Dalal Street ahead of Diwali, with rate cut hopes from the Fed, upbeat global cues, and the IMF raising India’s FY26 GDP forecast to 6.6 per cent,"  Prashanth Tapse, Senior Vice President (Research), Mehta Equities Ltd told PTI.

4) India-US trade talks hope: Investor sentiment also got a boost from expectations around India-US trade talks. Commerce Secretary Rajesh Agrawal is set to join the Indian delegation in Washington on Thursday, with discussions likely to focus on energy trade.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted "latest comments from the US administration indicate reduction in the India-US trade tensions and points to the possibility of a US-India trade deal in the next few weeks. China’s tough actions regarding the rare earth magnets have hit the US hard and, therefore, the US is keen on striking a deal with India with both countries making some concessions."

5) Rupee gains: The rupee appreciated 40 paise to 87.68 against the US dollar in early trade, supported by central bank intervention, a softer dollar index, positive domestic equities and lower crude prices, forex traders said.

Technical view

Anand James, Chief Market Strategist at Geojit Financial Services, said the Nifty’s close near the 25,330 level, which had been acting as a resistance, indicates strength.

"A sustained move above this region opens the possibility of testing 25,460 in the near term. However, low momentum remains a concern. Immediate support is seen near 25,260," he said.

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