The Indian stock market posted gains on Monday, buoyed by advancements in the automobile and metal sectors as investor sentiment improved due to anticipated GST tax cuts and reforms in China’s steel industry. The S&P BSE Sensex climbed by 76.54 points, or 0.09%, closing at 80,787.30. Meanwhile, the NSE Nifty 50 increased by 32.15 points, or 0.13%, to finish at 24,773.15.
However, as the session progressed, early gains were curtailed by a late sell-off, underscoring a prevalent “buy-on-dips, sell-on-rallies” strategy that indicated a cautious approach among investors. Vinod Nair, Head of Research at Geojit Investments, noted that while auto and ancillary stocks surged on rising expectations of demand recovery linked to the GST cuts, the IT sector remained sluggish amid overarching global uncertainties.
Global market dynamics also played a role, as optimism spread following weak U.S. job data, which fueled expectations of an impending Federal Reserve rate cut. Points of concern arose with rising crude oil prices due to renewed sanctions on Russian oil, while gold prices gained traction as investors turned to safe-haven assets amidst ongoing trade-related apprehensions.
In the United States, both the S&P 500 and Nasdaq posted gains on hopes for reductions in borrowing costs, prompted by the recent nonfarm payrolls report that suggested a weakening job market. Traders have shifted their expectations for rate cuts this year, with the probability of a 25-basis-point cut now reaching 88%, and some even speculating on a larger cut of 50 basis points.
European markets also opened on a positive note amid anticipation of a politically charged week in France, where Prime Minister Francois Bayrou faced a no-confidence vote as the economy struggles with substantial debt levels. Additionally, France was on the brink of several credit ratings reviews.
From a technical perspective, Nilesh Jain, Head of Technical and Derivatives Research Analyst at Centrum Broking, explained that the Nifty encountered resistance and failed to maintain levels above the 100-DMA, which stands around 24,800. The formation of a Doji candle on the daily chart suggests indecision among market participants. Immediate support levels are seen at 24,710, followed by 24,620, as the market continues to navigate within a range of 24,600 to 24,950 ahead of the weekly expiry. A significant breakout above the psychological 25,000 mark is crucial for triggering a northward trend, with potential targets of 25,300 and 25,500.
In terms of trading activity, Netweb Technologies emerged as the most active stock in value terms with Rs 2,883 crore, followed by Ola Electric Mobility at Rs 2,045 crore, Mahindra & Mahindra at Rs 1,699 crore, and Tata Motors at Rs 1,466 crore. Conversely, the most active stocks by volume included Vodafone Idea, Ola Electric Mobility, Motherson Sumi, YES Bank, and others.
Several stocks showcased promising buying interest, including Suven Pharma, Gujarat Mineral Development, Bharat Forge, and Ashok Leyland among others. On the other hand, companies like Amber Enterprises, EID Parry, and Trent faced notable selling pressure.
Market sentiment remained neutral, with a tally of 2,199 advances, 2,048 declines, and 160 stocks unchanged out of the 4,407 that traded on the BSE. As market participants sift through these developments, analysts remain vigilant about the evolving scenarios both locally and globally.
