Bull Charge: Sensex, Nifty see stellar rally, soar to 2-week highs
Sensex jumps 1,534 points and Nifty gains 375 points to hit two-week highs. Find out why Indian markets rallied, the top gainers and losers, and what experts say about the rally’s sustainability.
The markets saw a stunning rally today. The Sensex and the Nifty opened firm and continued to build on that and hit 2-week highs.
The Nifty ended 375 points higher, while the Sensex gained 1,534 points. Among the sectoral indices, the IT and Private Bank indices rallied over 1.50 percent. However some sectors saw selling despite the overall optimism.
Tech stocks were among the biggest gainers as concerns about AI valuations of stocks globally and unwinding of the global AI trade improved India’s relative appeal. The rupee’s strong 3-day run also helped sentiment
Some FMCG and retail names like Nestle and Trent saw sharp selling. The PSU Bank and Media indices fell nearly 1.5 percent despite strong momentum.
Outlining the key triggers for the rally, Vinod Nair, Head of Research, Geojit Investments explained that “Indian equities rallied sharply as concerns over stretched AI valuations and higher US inflation triggered a sell-off across tech-heavy global markets, improving India’s relative appeal and encouraging rotation toward domestic large-cap technology, private financials and defensive heavyweights.”
According to him, “Correcting bond yields, rupee stability and softening crude prices further supported sentiment, while hope of possible reconsideration of equity taxation added to risk appetite.”
That said, he pointed out that “weakness in small and midcaps and selling in PSU banks indicate that the rally lacks broad participation, suggesting benchmark gains may overstate underlying market strength. Near-term sustainability will therefore depend on Q2 earnings delivering on revenue and margins, broader market participation and evidence of returning foreign flows, while durable stability in oil and the currency remains crucial amid geopolitical and global inflation risks.”
Shrikant Chouhan, Head Equity Research, Kotak Neo is “of the view that the intraday market outlook is positive. However, buying on intraday dips and selling on rallies would be the ideal strategy for day traders. On the downside, 22,875/74,000 and 22,800/73,700 are key support zones. On the upside, 23,100–23,175/74,500–74,800 are key resistance areas for the bulls.”
However he believes that “sentiment could change if the market falls below 22,800/73,700. Below this level, traders may consider exiting their long positions.”
The key concern now is can this rally sustain. While sentiment has generally turned positive, investors would watch out for longer term triggers.
Related Stories
Gold prices near Rs 1.47 lakh/10 grams, silver falls by Rs 1,144/kg as traders await Fed rate signals. What lies ahead?
Gold prices edged lower while silver fell on MCX as investors awaited the US Federal Reserves upcoming policy decision for clues on interest rates. Traders expect rates to remain unchanged in October, with a possible hike in December. Analysts say dollar strength may cap golds upside, while central bank buying supports longer-term prices.
Infosys, TCS, Coforge, HCL Tech, TechM, Sagility: Selective rerating ahead, Jefferes shares target prices -
Infosys and TCS are seen as large IT companies offering 20 per cent-plus rerating potential in the best case. Sagility stands out among mid-sized companies, Jefferies said.
YES Bank share price targets: Goldman Sachs, Citi among 10 brokers with 'Sell' calls; what Nomura, others say -
Goldman Sachs has a target price of Rs 17 for YES Bank, while Citi sees the stock falling to Rs 16.50. Kotak Institutional Equities and Nuvama Institutional Equities have even lower targets of Rs 16.