The Indian stock market recorded gains on Tuesday, with Sensex and Nifty erasing all morning losses to sharply swing into the green as market witnessed strong volatility on first expiry day since the launch of closing auction session (CAS).
Sensex gained nearly 287 points to close at 77,656 while Nifty 50 gained 115 points to end the session at 24,334 on Tuesday. Broader markets remained mixed, with Nifty Smallcap 100 closing in the red and Nifty Midcap 100 in the green.
IndiGo shares jumped more than 2% to lead gains on Sensex, while Adani Ports, Infosys and Trent shares rose more than 1% each to follow. Bucking the trend, Eternal and HCLTech shares dropped nearly 1% each to lead losses on the benchmark index.
Among the sectors, Nifty Pharma, Nifty PSU Bank and Nifty Consumer Durables gained nearly 1% each, while Nifty Private Bank and Nifty Metal slipped into the red. The overall market breadth however favoured the bears, with NSE seeing 1,843 declines against 1,672 advances, while 122 stocks remained unchanged.
What lies ahead for Dalal Street?
The much-anticipated US sanctions against Iran fell short of market expectations, causing crude oil prices and bond yields to moderate from their recent peaks, said Vinod Nair, Head of Research, Geojit Investments. He noted that this relief in energy costs aided a moderately positive close today on the monthly expiry day.
Outperforming the broader market, healthcare and financial sectors gained as investors rotated into defensive and domestic-oriented sectors with signs of some stability in the domestic bond market. Market participants are now awaiting upcoming inflation data and comments from the Fed Chair later this week for better clarity on the inflation and interest rate outlook, he said.
However, near-term cautiousness is expected to continue for Indian equities as unresolved US-Iran tensions keep oil prices and bond yields relatively elevated, leaving investors sensitive to sudden shifts in the Middle East geopolitical landscape, according to the analyst.