Indices snap 3-day losing run driven by metal, auto shares

Benchmark stock indices Sensex and Nifty rebounded on Thursday, cutting short a three-day falling streak following buying in auto and metal stocks and a rate cut by the US Federal Reserve.

Rebounding from its early lows, the 30-share BSE Sensex climbed 426.86 points or 0.51 per cent, to settle at 84,818.13. During the day, it hit a high of 84,906.93 and a low of 84,150.19. The 50-share NSE Nifty appreciated by 140.55 points, or 0.55 per cent, to close at 25,898.55. Following initial volatility, the Nifty gradually moved higher and closed near the day’s peak of 25,922.80 as most sectors advanced.

Among the Sensex constituents, Eternal, Tata Steel, Kotak Mahindra Bank, UltraTech Cement, Maruti Suzuki India, Sun Pharmaceuticals, Tech Mahindra, HDFC Bank, Tata Motors Passenger Vehicles, Infosys, Trent, Mahindra & Mahindra, Reliance Industries and HCL Technologies were the gainers. However, Asian Paints, Bharti Airtel, Bajaj Finance, PowerGrid, Axis Bank, ICICI Bank and Titan were among the laggards.

“Domestic markets rebounded broadly following the Fed’s expected 25-bps rate cut amid high U.S. inflation. The decline in U.S. 10-year yields indicates a moderation in future FII outflows, which bolstered sentiment,” Vinod Nair, Head of Research, Geojit Investments Ltd, said. Nair added that the auto sector excelled due to anticipated stronger demand, while IT gained traction on the prospect of increased spending.

Conversely, other Asian markets experienced selling pressure over concerns about AI-driven valuations and rising Japanese yields, which negatively impacted overall domestic sentiment. Ajit Mishra – SVP, Research, Religare Broking Ltd said buying across IT, auto, metals, realty and banking helped offset recent weakness, supported by a decline in India VIX. Steady domestic sentiment was reinforced by robust equity inflows of Rs 29,894 crore in November. However, continued weakness in the rupee capped the momentum he added.

Broader markets rebounded, with the BSE midcap gauge rising 0.79 per cent and the smallcap index by 0.51 per cent. Among sectoral indices, Metal rose the most by 1.14 per cent, Auto by 1.08 per cent, Commodities by 0.94 per cent, IT and Telecommunication by 0.89 per cent each, Focussed IT by 0.87 per cent, Consumer Discretionary by 0.86 per cent, Healthcare by 0.77 per cent and Realty by 0.71 per cent. Oil & Gas was the only laggard. As many as 2,397 stocks advanced, while 1,786 declined and 158 remained unchanged on the BSE.

“Indian equities traded higher on Thursday, with the Nifty snapping a three-session slide to end higher, after the US Federal Reserve delivered a widely anticipated 25 basis point rate cut, a move investors hope will help temper foreign outflows,” Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said. Khemka added that uncertainty around progress in India-US trade negotiations, continuous foreign institutional investor selling, and the absence of major near-term triggers, with the Fed rate cut now behind, are likely to keep market sentiment somewhat lacklustre.

Meanwhile, Foreign Institutional Investors (FIIs) remained the net sellers of equities worth Rs 1,651.06 crore on Wednesday while Domestic Institutional Investors (DIIs) bought stocks worth Rs 3,752.31 crore, according to the exchange data. On Wednesday, the 30-share BSE Sensex dropped by 275.01 points to settle at 84,391.27, while the broader NSE Nifty fell by 81.65 points to close at a month’s low of 25,758.