Markets gain for 3rd day on Fed boost; Sensex reclaims 83K, Nifty tops 25,400

Indian equities continued their upward momentum this week, with benchmark indices extending their gaining streak for the third straight session as global cues turned supportive. The Federal Reserve’s much-anticipated rate cut provided a much-needed boost to the market, propelling the Sensex back above the 83,000 mark, while the Nifty crossed the 25,400 level.

The BSE Sensex climbed 320.25 points, or 0.39%, to settle at 83,013.96, while the NSE Nifty50 settled at 25,423.60, up 93.35 points or 0.37%.

In sync with benchmark indices, broader markets also ended in positive terrain. The Nifty Midcap100 rose 0.38%, and the Smallcap100 index ended 0.29% higher amid broad-based buying.

“The market’s upward momentum was underpinned primarily by the US Federal Reserve’s rate cut of 25 basis points, which boosted risk sentiment globally. Besides, the sentiment stayed constructive, supported by sustained domestic flows and rotational buying in key sectors,” said Ajit Mishra – SVP, Research, Religare Broking.

Market breadth, however, remained slightly negative as the advance-decline ratio tilted in favour of losers. Within the Nifty 500 universe, only 234 stocks closed in the green, reflecting selective buying across sectors.

Meanwhile, the India VIX, the fear gauge of market volatility, dropped 3.5% to 9.89, indicating the calmer mood on the Street.

Top gainers and losers

On the BSE Sensex pack, 22 out of 30 stocks ended in the green zone, with Eternal (Zomato) emerging as the top gainer, surging nearly 3%. Sun Pharma was the second on the gainers chart with a 1.8% rise. IT majors Infosys and HCL Tech added 1.1% and 0.8%, respectively, while HDFC Bank gained 1%.
On the other hand, Tata Motors was the top loser, slipping 1.1%. Trent (-1%), Bajaj Finance (-0.8%), Asian Paints (-0.6%), and UltraTech Cement (-0.6%) were among other notable losers.

On the sectoral front, pharmaceuticals led the rally, emerging as the biggest beneficiaries of the Fed rate cut. The Nifty Pharma index climbed 1.5%, led by Natco Pharma, Biocon, and Gland Pharma. Technology stocks also extended their gaining streak for the third day.

In contrast, autos, PSU banks, and real estate shares came under pressure, while media and metal counters ended as the biggest losers.

Technical outlook

From a technical standpoint, the Nifty index is currently trading above all major moving averages, and momentum indicators such as RSI and MACD are also pointing towards continued bullish strength, said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.

“Going ahead, we expect the Nifty to test the levels of 25,600, followed by 25,750 in the short term. On the downside, the zone between 25,300–25,270 is likely to act as a crucial support area,” he said.

Rupak De, Senior Technical Analyst at LKP Securities, said the short-term trend is likely to stay positive as the Nifty index is comfortably trading above its critical moving average. “The daily RSI is in a bullish crossover and rising above the previous swing high, indicating strengthening momentum.”
In the near term, Nifty has support at 25,300 and 25,150, while resistance is pegged at 25,500. A convincing break above this hurdle could open the doors for a rally towards 26,000, he said.

According to Nilesh Jain, Head – Technical and Derivatives Research, Centrum Broking Ltd., the index is forming a higher top and higher bottom pattern on the daily chart, a classic signal of a positive trend.
“The overall technical setup remains strong, and the index now looks set to test the 25,650 level. Support has shifted higher to around 25,300,” he noted.

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