Final Trade: Sensex gains 182 pts, Nifty closes at 24,667 amid volatility; metals rally, banks fall

Indian benchmark indices staged a robust recovery on Wednesday, with the Nifty soaring above the 24,660 mark and the Sensex gaining over 180 points as a strong rally in IT and metal stocks injected fresh momentum into the market. While banking stocks faced profit-taking pressure, positive cues from cooling inflation and easing market volatility further bolstered investor sentiment.

At the closing bell, the Sensex settled at 81,330.56, up by 182.34 points or 0.22 percent. The Nifty mirrored this upward trajectory, closing at 24,666.90, a gain of 88.55 points or 0.36 percent. The breadth of the market was overwhelmingly positive, with 2749 stocks advancing against 1085 declining, and 134 remaining unchanged.

The IT sector also witnessed a significant rebound, with the Nifty IT index climbing by 1.34 percent. This resurgence provided crucial support to the overall market sentiment. Other notable gainers included Nifty Realty (up 1.7 percent), Nifty Energy (up 1.42 percent), Nifty Media (up 1.27 percent), and Nifty Oil & Gas (up 1.22 percent).

Banking Sector Faces Profit Booking

In contrast to the broad-based rally, the banking sector experienced some profit-taking. The Nifty Bank index declined by 0.25 percent, while the Nifty Private Bank index fell by 0.19 percent. This selling pressure in banking stocks partially capped the overall gains in the benchmark indices. Nifty FMCG and Nifty Consumer Durables saw marginal gains of 0.03 percent and 0.09 percent, respectively.

Broader Market Outperforms Frontline Indices

The broader market demonstrated significant strength, outperforming the benchmark indices. The Nifty Smallcap 100 index surged by 1.1 percent, while the Nifty Midcap 100 index gained a substantial 1.44 percent. This trend suggests continued investor confidence in the broader market segments as the earnings season concludes, largely aligning with expectations.

Cooling Inflation and Easing Volatility Boost Sentiment

Adding to the positive market mood was the news of April CPI inflation cooling to a 14-month low of 3.16 percent. This decline in inflation has raised hopes for potential interest rate cuts in the future, further buoying market sentiment.

Market volatility also eased significantly, with the India VIX index dropping by over 5 percent to settle below the 18 mark at 17.22. This decrease in volatility indicates a reduction in market jitters and increased investor comfort.

Key Gainers and Losers

On the Nifty, the top gainers were Tata Steel, Shriram Finance, Hindalco, Bharat Electronics, and Eternal. Conversely, the top laggards included Asian Paints, Cipla, NTPC, Kotak Mahindra Bank, and Tata Motors.

Tata Motors witnessed a 1 percent decline after reporting a 51 percent fall in net profit for the March quarter. Jefferies has assigned an ‘underperform’ rating to the stock, citing concerns over JLR’s margins due to US tariffs, increased competition in China, and rising customer acquisition costs.

Defence stocks continued their upward trajectory, fueled by expectations of increased orders, with Cochin Shipyard, GRSE, and Mazagon Dock leading the gains.

Tata Steel’s shares jumped by 4 percent as investors reacted positively to the company’s robust quarterly earnings, which saw a significant jump in consolidated profit driven by lower input costs and improved sales volumes.

Market Outlook

According to Anand James of Geojit Investments Limited, the recent dip in the market found support near the 24,590–24,550 zone. While acknowledging some underlying weakness, he anticipates a rebound in early trade but cautions that any upside might be limited if the index fails to decisively clear the 24,660–24,726 zone. Failure to sustain above this level could potentially trigger another decline towards the 24,509–24,424 range.

Overall, the Indian market witnessed a positive closing session, driven by strong performances in the IT and metal sectors, supported by easing inflation and volatility. However, investors will continue to monitor global cues and FII activity for further direction.