Stock market: Sensex rises 960 pts in 3 days, Nifty above 25,900; more upside ahead?

Domestic equity benchmarks Sensex and Nifty extended their rally for a third consecutive session on Tuesday, tracking firm cues from global markets, a slight revival in foreign inflows and sustained optimism around the interim India–US trade agreement.

At close, the Sensex added 208.17 points, or 0.25 per cent, to settle at 84,273.92, taking its three-day rally to 960 points, while the Nifty gained 67.85 points, or 0.26 per cent, to end at 25,935.15, marking a cumulative gain of 292 points over the past three sessions. 

Eternal emerged as top gainer on the Sensex, rising 5.14% to Rs 303.70. Tata Steel followed with a 2.82% gain, while Mahindra & Mahindra, Tech Mahindra, Power Grid and NTPC advanced 1.79%, 1.66%, 1.36% and 1.35%, respectively. 

A strong resurgence in FII inflows, combined with rupee appreciation, is bolstering investor sentiment, despite intermittent profit-booking across sectors, said Vinod Nair, Head of Research at Geojit Investments Limited. 

Five stocks, namely Eternal, Larsen & Toubro (L&T), Mahindra & Mahindra (M&M), ICICI Bank and Tata Steel, contributed heavily to the Sensex’s fall.  

“With tariff-related concerns largely easing, the near-term market trajectory will hinge on Q3 earnings, which have been mixed and below expectations so far. Investors are now focused on the combined impact of recent fiscal and monetary measures to revive earnings momentum in the coming quarters,” Nair said.

Among sectoral indices, the BSE Auto index gained 1.35% to close at 62,553.83, while the BSE Metal rose 0.83% to settle at 40,292.44. 

“We are of the view that the short-term market outlook remains positive, but there could be a quick intraday dip if the index slips below 25,900/84100. Below this level, the market could retest the levels of 50 day SMA or  25,800-25,750/83700-83500,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.

In the Sensex index, shares of State Bank of India (SBI), Tata Steel, Titan Company and UltraTech Cement hit their fresh 52-week high on BSE. 

“We reiterate our bullish stance on the Nifty and continue to recommend a buy-on-dips approach with a focus on careful stock selection.,” said Ajit Mishra – SVP, Research, Religare Broking Ltd. There will most likely be some consolidation around current levels within a narrow range before the index makes another attempt to decisively cross the 26,000 mark, he added.

Market breadth remained positive on the BSE. Of the 4,407 actively traded stocks, 2,600 ended in the green, while a dominant 1,644 declined and 163 settled unchanged. The session saw 127 stocks scaling fresh 52-week highs, compared with 56 counters sliding to new 52-week lows. In addition, 204 scrips were locked at their upper circuits, whereas 128 hit lower circuit limits.

“On the higher side, 26,000/84500 would be the immediate resistance zone for the bulls. A successful breakout above 26,000/84500 could push the market up to 26,100-26,150/84800-85000,” Chouhan added.

“A sustained move and acceptance above 26,000 could revive upside momentum toward 26,300, while a breakdown below 25,800 may open room for a slide toward 25,700. Momentum indicators remained largely unchanged,” said Ponmudi R, CEO of Enrich Money.

Ponmudi said that the near-term outlook remains mildly positive with a consolidative bias, with upside limited unless a clear breakout above 26,000 occurs.