Mumbai: Equity benchmark indices Sensex and Nifty rebounded to finish with impressive gains, despite a weak start on Tuesday, driven by a surge in buying within the services and telecom sectors amid optimism surrounding a US-India trade agreement. The 30-share BSE Sensex commenced trading negatively, dropping 411.32 points or 0.49 percent to 83,124.03. The 50-share NSE Nifty also fell by 125.1 points, or 0.48 percent to 25,449.25 in early trading. Nevertheless, both indices made a strong recovery, closing the session with notable gains. The Sensex rose 335.97 points, or 0.40 percent, to close at 83,871.32, while the Nifty increased by 120.60 points, or 0.47 percent, closing at 25,694.95.
“The domestic market opened weakly due to worries about the potential effects of the Delhi explosion. However, it rebounded sharply and closed at the day’s peak, buoyed by global cues as the US Senate passed a bill to end the longest federal shutdown in history. “Crucially, the Q2 earnings season is approaching its conclusion and is anticipated to end positively, driven by better-than-expected results across the broader market. The rally was further supported by gains in the IT, auto, metal, and FMCG sectors,” stated Vinod Nair, Head of Research at Geojit Investments Ltd.
Among the Sensex companies, Bharat Electronics Ltd, Mahindra & Mahindra, Adani Ports, HCL Technologies, Eternal, Infosys, Bharti Airtel, Sun Pharmaceuticals, Larsen & Toubro, Hindustan Unilever, and UltraTech Cement were among the gainers. In contrast, Bajaj Finance, Tata Motors Passenger Vehicles, Kotak Mahindra Bank, PowerGrid, and Tata Steel were some of the laggards. Bajaj Finance fell over 7 percent as investors became cautious following the company’s lower Assets Under Management (AUM) growth guidance and increasing signs of asset stress. Bajaj Finserv dropped by 6.26 percent. “Investors are currently anticipating upcoming domestic inflation data, with expectations of continued moderation due to a steady decline in food prices, raising the possibility of further policy easing by the RBI.
Looking ahead, earnings are expected to see a strong rebound in the third quarter, supported by various domestic tailwinds, although much will hinge on the successful finalization of a trade deal with the US,” Nair added.