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.
Top Gainers & Losers
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.
Expert Views
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.
Global Markets
Asian equities found some reprieve on Monday as rising expectations of lower U.S. borrowing costs helped ease investor anxiety over the health of the world’s largest economy, even as doubts lingered over the long-term credibility of U.S. fiscal policy.
U.S. Treasuries saw mild profit-taking following last week’s rally, but Fed funds futures continued to price in an 85% probability of a Federal Reserve rate cut in September, with markets anticipating at least 100 basis points of easing over the next year, according to Reuters.
The decline in global bond yields lent support to equities. S&P 500 and Nasdaq futures each rose 0.4%, while EUROSTOXX 50 futures advanced 0.6%. FTSE 100 futures gained 0.5% and Germany’s DAX futures edged up 0.4%.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7%, buoyed by a 1.1% rally in South Korean stocks. However, Japan’s Nikkei fell 1.4%, dragged down in part by Friday’s rebound in the yen. Chinese blue chips were little changed.
In commodities, gold held steady at $3,357 an ounce after gaining more than 2% in the previous session.
