After two days of profit booking, India’s domestic equity markets opened on a positive note on October 1, led by gains in IT, energy, and auto stocks.
The Sensex rose by 318 points, or 0.4%, to 84,617, while the Nifty 50 climbed by 86 points, or 0.3%, to 25,896 at 9:20 AM.
This upward movement comes as 1,803 shares advanced, 690 shares declined, and 138 shares remained unchanged.
Although the broader market demonstrated some resilience, there were contrasting performances within sectors.
IT stocks benefitted from positive cues from the US market, while auto stocks gained traction due to the release of encouraging monthly sales data.
However, the metal index faced a decline after a strong seven-day rally.
Sensex and Nifty 50: will the rebound hold?
The Sensex’s recovery was driven by gains in IT and auto stocks, sectors that have been outperforming amid global trends and domestic demand. As of early trading, the index rose by 318 points, indicating a potential rebound from the previous days’ losses.
Market strategists, however, remain cautious.
Anand James, Chief Market Strategist at Geojit Financial Services, suggests that while the Nifty could attempt to push towards 25,945, a downside risk to 25,600-24,600 remains.
James notes that trading above 25,890 could potentially strengthen recovery prospects over the next few days.
IT sector gains as Tech Mahindra leads the way
The Nifty IT index showed strong early performance, gaining nearly 1% as it followed the Nasdaq Composite’s 0.4% overnight rise.
The gains were broad-based, excluding LTIMindtree, with the other nine constituents rising between 0.3% and 4%.
Brokerage firm Nuvama projects a stable Q2FY25 for IT companies, driven by gradual growth and positive sentiment across the sector.
Tech Mahindra was the standout performer on the Nifty 50, rising over 4% after CLSA upgraded the stock to ‘Outperform’ from ‘Hold.’
This upgrade was attributed to a recent price correction that presented new opportunities for the stock.
Auto stocks rise as sales data trickles in
As monthly sales data began to roll in, auto stocks saw increased attention. M&M, Tata Motors, and Ashok Leyland drove the Nifty Auto index up by 0.3%.
M&M shares climbed on the back of September sales figures, showing a 24% rise, largely led by SUV sales.
This sector is expected to gain further momentum as more sales data is released, potentially pushing the Nifty Auto index higher in the coming sessions.
Metal sector cools off after rally
After an impressive seven-day rally driven by China’s property sector stimulus and rising iron ore prices, the metal index saw a decline of 0.8%.
Major stocks such as Hindalco, JSW Steel, and Tata Steel slipped as traders engaged in profit booking.
While the recent rally has been driven by optimism in the global metal markets, especially from China, market analysts expect some consolidation before the sector embarks on its next upward leg.
Broader market trends
In the broader market, the BSE Midcap index inched up by 0.1%, while the BSE Smallcap index saw a stronger rise of 0.4%, reflecting the diverse performance across different market segments.
Despite some headwinds in sectors like metals, there are signs of optimism in the IT and auto sectors, which could continue to lead the markets in the near term.
Global cues influence Indian markets
Globally, Federal Reserve Chair Jerome Powell’s recent comments about the potential for smaller interest rate cuts in the future provided some relief to markets.
Powell stressed that recent US economic data suggested strong growth and consumer spending, reducing the urgency for further rate cuts.
The overnight rally in US markets—where the S&P 500 and Dow Jones Industrial Average reached record closes—also had a positive impact on Asian-Pacific markets today, with Indian indices benefiting from this global momentum.
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