Sensex soars 450 pts, Nifty above 25,200: Easing inflation, IT buying, other key factors behind market rebound

Sensex, Nifty rise in July 15 trading session.

The benchmark equity indices Sensex and Nifty bounced back on Tuesday after four consecutive sessions of losses, tracking easing retail inflation and positive global cues.

Retail inflation fell to an over six-year low of 2.1 percent in June, moving closer to the Reserve Bank of India’s comfort zone and raising expectations of a rate cut in August. Overnight gains on Wall Street and a positive trend in Asian markets also supported domestic equities.

Sensex rose 490.16 points or 0.59 percent to an intraday high of 82,743.62, while the broader Nifty advanced 162.9 points or 0.64 percent to the day's high of 25,245.20.

Hero MotoCorp, Sun Pharmaceutical Industries, Bajaj Auto, Eicher Motors and IndusInd Bank were among the top gainers in the Nifty pack, rising up to 4 percent intraday.

Key Factors Behind the Market Rebound:

1) Rate Cut Expectations: The Consumer Price Index (CPI)-based inflation eased to 2.1 percent in June, compared to 2.82 percent in May and 5.08 percent in June last year. Inflation has been on a downward trend since November 2024. The National Statistical Office (NSO) said the year-on-year CPI inflation for June 2025 over June 2024 stood at 2.1 percent, driven by a fall in food prices amid widespread monsoon.

"A significant macro trend is the decline of CPI inflation in June to 2.10 percent. It appears that inflation will undershoot RBI's projection of 3.7 percent CPI inflation for FY26. This has raised rate cut hopes," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

2) Global Market Support: Asian equities traded higher, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng in the green. US markets also closed on a positive note on Monday, with Futures pointing to a firm opening on the Wall Street.

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3) Crude Oil Price Decline: Brent crude futures slipped 0.39 percent to USD 68.94 a barrel, after recently breaching the USD 71 mark. Lower crude prices are positive for India, which imports the bulk of its oil requirement, easing pressure on inflation.

4) Buying in IT Stocks: Nifty IT index rebounded, gaining up to 1 percent after a four-session slide. At 12.10 p.m., the index was up 0.56 percent at 37,480.80. All constituents, except HCL Technologies, traded higher. Infosys, Wipro and LTIMindtree led the gains, rising up to 2 percent.

The IT pack had come under pressure following Tata Consultancy Services’ Q1 results, which indicated muted demand and weak commentary. Experts expect a soft quarter ahead, with broad-based stress across key verticals.

Nifty IT snaps four-session losing streak to gain 1%; all constituents, barring HCL Tech, rally

Technical View:

Anand James, Chief Market Strategist at Geojit Financial Services, said the recent downtrend has slowed near the 200-day simple moving average.

"Approach to the 200-day SMA has slowed down the decline's momentum, while the broader market has also shown signs of an uptick. However, we are yet to spot signs of a vertical recovery, and upswing attempts are most likely to be turned down by either 25,170 or 25,220. A direct rise above the same could signal bullishness, with initial eyes on 25,420. Prospects of the same appear low though, while a collapse beyond 24,920 is also less expected today," he said.

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