The S&P BSE Sensex rose 554.84 points to close at 80,364.49, while the NSE Nifty50 climbed 198.20 points to end at 24,625.05. This surge broke a three-day losing streak, driven by buoyant investor sentiment following the release of India’s Q1 GDP growth figures, which stood at 7.8%, surpassing projections.
The positive sentiment was reflected in the gains of auto and IT sector stocks.
Vinod Nair, Head of Research at Geojit Investments Limited, stated that India’s robust GDP growth has “reinforced investor confidence in the economy’s resilience amid global uncertainties. Expectations of GST rationalisation at the upcoming council meeting continue to bolster sentiment, supporting discretionary consumption. This optimism is particularly benefiting sectors such as Auto and Consumer Durables.”
The stock market saw broad-based buying across various sectors, with Mahindra & Mahindra leading the gains at 3.65%, followed closely by Tata Motors at 3.17%, Trent at 2.71%, Eternal at 2.23%, and Asian Paints at 2.13%. However, Sun Pharma experienced the biggest decline, dropping by 1.87%, with ITC, Hindustan Unilever, Titan, and Reliance Industries also seeing slight decreases. The Nifty Midcap100 and Nifty Smallcap100 indices also registered gains of 1.97% and 1.57%, respectively.
Despite the optimism, concerns over potential revenue shortfalls from proposed GST adjustments were noted, as “Expectations of GST rationalisation at the upcoming council meeting continue to bolster sentiment, supporting discretionary consumption,” though “the risk of a potential revenue shortfall…has heightened concerns,” affecting domestic bond yields.
Nandish Shah – Deputy Vice President, HDFC Securities said, “Today’s rise has validated the bullish implications of “inverted hammer” candlestick pattern formed on 29th Aug on the daily charts. Nifty seems to have reversed the short-term trend towards north. Immediate resistance for index is now seen at 24,800 above which sharp short covering is expected. However, any level below 24,400 would resume the downtrend, which could further drag Nifty towards the next support of 24,270(200 DEMA).”
Sectoral indices displayed strong performance, particularly in Nifty Auto, which rose 2.90%, and Nifty Consumer Durables, which grew 2.06%. In contrast, Nifty Media and Nifty Pharma experienced declines of 0.32% and 0.12%, respectively.
IT shares recovered after three sessions of losses on Monday on hopes that US Federal Reserve was likely to cut lending rate this month.
The BSE IT index zoomed 573 points to reclaim the 35,000 mark after two sessions on Monday. Later, the index ended 558 points higher at 34,995. On similar lines, Nifty Bank index too gained 347 points to close at 54,002 in the current session.