Sensex up 700 pts, Nifty tests 25,000; IT, pharma stocks drag while small, midcaps outperform

Sensex, Nifty

Benchmark indices Nifty and Sensex came off highs as selling intensified in IT and pharma stocks, even as autos, banks, FMCG and metals provided support. Broader indices outperformed, reversing the morning trend and gaining more than the frontline benchmarks.

At about 12:25 pm, the Sensex was up 738.94 points or 0.92 percent at 81,336.60, and the Nifty was up 264.70 points or 1.07 percent at 24,896.00. About 2295 shares advanced, 1339 shares declined, and 143 shares remained unchanged.

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The market is riding strong tailwinds with potential for further gains. Prime Minister Modi’s Independence Day announcement on major GST reforms by Diwali is seen as a big positive, with expectations that most goods and services will be moved into the 5 percent and 18 percent tax slabs, V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said. "The upgrade of India’s sovereign rating by S&P is another key boost. However, negative developments are capping sentiment. India-US trade talks are unlikely before the August 27 deadline, and the risk of a 50 percent tariff from Washington continues to loom. Markets will also closely track the outcome of the White House meeting today on the Russia-Ukraine conflict," he added.

At mid-day, the rally was led by auto stocks with the Nifty Auto index surging 4.6 percent, while consumer durables and realty also gained sharply, up 3.4 percent and 2.2 percent, respectively. Banking stocks were firm, with both private and PSU banks advancing over 1 percent. FMCG, metals and infrastructure indices added to the strength. On the flip side, IT and pharma remained under pressure, down 0.5 percent and 0.4 percent, while energy and oil & gas were flat. The India VIX inched 1.2 percent higher to 12.5, reflecting a slight uptick in volatility.

Among stock moves, India's largest auto maker, Maruti Suzuki, rallied over 9 percent, recording their sharpest single-day rise in five years after reports of a likely GST cut on entry-level two-wheelers, compact cars and hybrids. Morgan Stanley noted that Hero MotoCorp and Eicher Motors stand to gain the most among two-wheelers, with Maruti Suzuki and M&M emerging as key beneficiaries in passenger vehicles.

Ashok Leyland climbed 7 percent after the company reported an in-line set of June quarter (Q1FY26) numbers. The Street cheered its steady operating performance, with brokerages turning positive on the counter and projecting further gains of up to 15 percent from the day’s high. UBS reiterated a “buy” call on the stock with a target price of Rs 150, highlighting that the company delivered a margin beat on the back of operational discipline.

Also read: Brokerages see autos, cement, ACs and consumption stocks as top GST 2.0 winners

Banking and non-banking financial institutions such as HDFC Bank, ICICI Bank, and Bajaj Finance rallied up to 6 percent after credit ratings agency S&P Global upgraded the ratings of the top 10 financial institutions, saying that India's financial institutions will continue to ride the country's good economic growth momentum.

Vodafone Idea shares rallied as much as 8 percent as investors took heart from the telco’s June quarter performance, where losses narrowed sequentially. The upbeat tone in the broader market also added to the momentum. Net loss came in at Rs 6,608 crore, wider than the Rs 6,432 crore loss a year ago but an improvement from Rs 7,166 crore reported in the March quarter.

Technical View

"A decisive move above 24,750 could open the way for an upside toward 24,900 and 25,000, while immediate support lies at 24,600 and 24,500 — both considered attractive zones for fresh long positions," Amruta Shinde of Choice Equity Broking said. "Similarly, the Bank Nifty also opened flat and consolidated within a narrow range of 55,000–55,500 during the session. A breakout from this range, supported by strong price action, is likely to determine the next directional move. Key supports are placed at 55,000 and 54,900, while resistance is seen in the 55,670–56,000 zone. A convincing breakout above this resistance range could pave the way for a rally toward the psychological 56,200 level," she added.

Maruti Suzuki, Nestle, Hero MotoCorp, Bajaj Finance, and M&M were the top gainers on the Nifty. Laggards on the index included Dr Reddy's, Larsen & Toubro, Infosys, HCL Tech, and ITC.

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