Sensex, Nifty Extend Gains As Banking, Auto Stocks Offset IT Weakness

Indian benchmark indices ended firmly higher on Monday, supported by broad-based buying in financial, auto, realty and metal stocks as stable crude oil prices and improving foreign institutional investor (FII) flows boosted sentiment despite mixed global cues.

The BSE Sensex climbed 521.16 points, or 0.67%, to close at 78,285.07, while the NSE Nifty 50 advanced 159.50 points, or 0.66%, to settle at 24,430.35, ending above the 24,400 mark.

Market breadth remained mixed, with 1,924 stocks advancing, 2,226 declining and 185 remaining unchanged.

Among the Nifty constituents, HDFC Bank, Hindalco Industries, ONGC, Bajaj Auto and Mahindra & Mahindra were the top gainers. Kotak Mahindra Bank, TCS, Max Healthcare, Bajaj Finserv and Coal India ended among the biggest losers.

Financials, Realty Lead Sectoral Gains

Sectoral performance remained broadly positive, with Nifty Realty emerging as the top performer, rising 1.8%. Consumer Durables gained 1.5%, followed by Auto at 1.3%, Oil & Gas at 1.1%, Metal at 1% and Energy at 0.7%.

On the other hand, Media was the worst-performing sector, falling 0.95%, while PSU Bank declined 0.9% and IT slipped 0.6%.

The broader market also participated in the rally, with the Nifty Midcap 100 gaining 0.4% and the Nifty Smallcap 100 rising 0.7%.

Stable Crude, FII Trend Support Market

Vinod Nair, Head of Research at Geojit Investments, said Indian equities traded with a positive bias despite mixed global cues, supported by stable crude oil prices.

He said continued softness in crude prices would help India's inflation outlook, current account balance, oil marketing company profitability and overall macroeconomic stability.

According to Nair, while profit booking in crowded artificial intelligence-driven trades weighed on global markets, India is relatively well placed to outperform, led by large-cap stocks as foreign institutional investor inflows continue to improve.

He added that financial stocks gained on expectations of healthy quarterly earnings from private sector banks, while automobile stocks benefited from strong sales volumes and an improving demand outlook. Realty shares also remained supported by resilient housing demand.

Technical Outlook Remains Positive

Rupak De, Senior Technical Analyst at LKP Securities, said the Nifty remained strong throughout the session after opening on a positive note and sustained its uptrend by holding above its key short-term moving average.

He noted that the index closed above its 50-week exponential moving average for the first time in more than four months, signalling improving medium-term market strength.

According to De, declining India VIX levels reflect improving investor confidence. He expects the Nifty to extend gains towards the next key resistance level of 24,800, while immediate support is placed at 24,300.

The Indian rupee weakened by 18 paise to close at 95.40 against the US dollar, compared with Friday's close of 95.22.

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said the rupee came under pressure as the Dollar Index climbed back above 101, reversing some of the domestic currency's recent gains.

He said investors will now monitor this week's US Manufacturing PMI, Services PMI and the Federal Reserve meeting minutes for further clarity on the US interest-rate outlook, with these developments expected to drive both the dollar and emerging-market currencies.

According to Trivedi, the rupee is likely to trade in the 95.15-96.50 range in the near term, with global cues and foreign fund flows remaining the primary drivers.