The benchmark equity indices advanced on Monday tracking firm global cues and a positive tone by US President Donald Trump towards India.
At around 2:30 p.m., Sensex climbed 444.06 points or 0.55 percent to 81,154.82, while the Nifty advanced to 24,875, up 134 points or 0.54 percent.
Tata Motors, Mahindra & Mahindra, JSW Steel, Bajaj Auto and Tata Steel were among the major gainers, rising up to 3 percent.
Key factors behind market rise today
1) Hopes of improvement in India-US ties: Market sentiment improved after Trump said the US and India share a “special relationship” and “there is nothing to worry about.” Prime Minister Narendra Modi responded saying he “deeply” appreciated and “fully” reciprocated the remarks. Analysts said the exchange of statements has raised hopes of easing trade tensions, particularly after recent tariff announcements.
2) Positive global cues: In Asia, South Korea’s Kospi, Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng were trading in the green. US stock futures were also higher, indicating a positive opening on Wall Street.
3) GST rate cut optimism continues: Optimism over the recent GST rate cut continued to support investor sentiment. "Post-September 22, when the new GST rates come into effect, there will be a huge spurt in demand, particularly for automobiles and consumer durables," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
4) Fed rate cut hopes: Weak US labour data further boosted expectations of a Federal Reserve rate cut later this month. "The Fed is widely expected to cut rates by 25 bps at its 17 September meeting," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
5) Auto shares rise: Auto stocks surged after companies announced price cuts following the GST Council’s decision to lower taxes on vehicles. The Nifty Auto index rose over 1.5 percent to 26,718, led by Bharat Forge and Ashok Leyland, which gained around 4 percent each.
6) Rise in Metal shares: Metal shares also advanced after Morgan Stanley turned positive on the steel sector, citing improving demand and favourable global conditions. The brokerage raised its steel price estimates by 3 percent for FY27 and FY28.
Metal stocks rally as Morgan Stanley turns constructive on steel sector; Tata Steel, SAIL up 3%
Technical view
Anand James, Chief Market Strategist, Geojit Financial Services, said: "The close above the 20-day SMA on Friday suggests enough risk appetite to push higher. A move above 24,870 could open the way towards 25,400. On the downside, failure to hold 24,700 or a fall below 24,500 could re-expose 24,075."
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