Sensex climbs 419 pts, Nifty tops 24,700 as Fed rate cut hopes boost IT and metals
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Indian equities ended in the green on Monday, buoyed by gains in IT and metal stocks, as rising expectations of a U.S. interest rate cut helped offset concerns over possible American tariffs on Indian exports.The BSE Sensex rose 418.81 points, or 0.52%, to close at 81,018.72, while the NSE Nifty added 157.40 points, or 0.64%, to end at 24,722.75.Metals index surged 2.5% to lead sectoral gains, supported by a weaker dollar that made commodities more affordable for overseas buyers.IT stocks, which derive a significant share of revenue from the U.S., advanced 1.6% as hopes for a Federal Reserve rate cut strengthened following signs of a cooling U.S. labour market. U.S. jobs data showed fewer-than-expected jobs were added in July, with sharp downward revisions to prior months' figures, pushing market odds of a September rate cut to 80% from 63% a week earlier.Auto shares also climbed 1.6%, driven by Hero MotoCorp and TVS Motor, which climbed 5% and 2.9% respectively, after both companies reported robust July sales.Among individual stocks, shares of agro-chemicals producer UPL soared 7% to rank among the top midcap performers, buoyed by higher volumes and margin expansion in the first quarter. Multi Commodity Exchange of India jumped 5% after posting strong quarterly earnings and unveiling plans for a stock split.The midcap and smallcap indices advanced 1.4% and 1.3%, respectively.The domestic equity market edged higher, supported by strong performance in the metal and auto sectors, said Vinod Nair, Head of Research, Geojit Investments, adding that 'a weakening U.S. dollar, along with robust monthly auto sales and encouraging quarterly results from leading automakers, helped renew investor interest in these sectors.''The Q1 earnings summary indicates that consumption-driven companies are benefiting from a rebound in volume demand. Meanwhile, rising unemployment and slower job creation in the U.S. have reinforced expectations of a potential FED rate cut. However, there still remains room for caution due to high U.S. tariffs," said Nair.On a technical basis on the Nifty, market participants should avoid reading too much into a single-day rebound or pause and instead focus on the sustainability of the move, said Ajit Mishra, SVP, Research, Religare Broking, adding that 'a decisive break above 24,800 could trigger further upside toward the 25,000 marks, which acts as the next key resistance.''Conversely, a close below 24,600 would indicate a resumption of the corrective phase,' said Mishra.
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