Sensex, Nifty extend gains as auto stocks shine; what's next?

Indian equity benchmarks extended their gains on Thursday, supported by strong buying in automobile stocks, while select information technology (IT) counters also aided the upmove. The 30-share BSE Sensex pack advanced 273.55 points or 0.35 per cent to settle at 77,928.15. The broader NSE Nifty50 index climbed 66.95 points or 0.28 per cent to end the session at 24,317.15.

Among the top gainers on the Sensex were Reliance Industries Ltd (RIL), HDFC Bank Ltd, State Bank of India (SBI), Mahindra & Mahindra Ltd (M&M), Maruti Suzuki India Ltd, Bharti Airtel Ltd, Tech Mahindra Ltd, Power Grid Corporation of India Ltd and Sun Pharmaceutical Industries Ltd.

However, the broader market underperformed the benchmark indices. Nifty Midcap100 declined 0.35 per cent, while Nifty Smallcap100 fell 0.56 per cent.

Vinod Nair, Head of Research at Geojit Investments, said, "The Fed's decision to maintain the status quo on rates was largely anticipated, but hawkishness remained due to continued emphasis on inflation control. A sharp uptick in US bond yields signalled growing pressure for a possible rate hike in the near future, keeping global investors on edge, while renewed crude oil volatility amid West Asian tensions added to external uncertainty. As a result, domestic equities stayed range-bound with sharp intraday swings, as investors weighed global headwinds against resilient domestic fundamentals. Nonetheless, strengthening FII inflows, a firmer rupee, and encouraging Q1 FY27 supported sentiment, prompting investors to treat dips as selective buying opportunities."

Ponmudi R, CEO of Enrich Money, noted, "Indian equity markets ended higher on a resilient note, extending their gains despite weak global cues, as strong domestic earnings and sector-specific buying helped offset concerns over renewed US-Iran hostilities and the deepening sell-off in Asian technology stocks. Nifty opened on a subdued note and traded in a narrow range for most of the session before late buying lifted the index into positive territory by the close. Automobiles emerged as the best-performing sector, advancing more than 1 per cent after M&M's stronger-than-expected first-quarter results boosted sentiment across the space. The IT sector also extended its recent rally, continuing to outperform despite persistent weakness in Asian semiconductor and AI-related technology stocks, highlighting sustained investor preference for India's software exporters."

He added, "On the global front, the US-Iran conflict escalated sharply as the US launched a fresh wave of strikes on Iranian targets, with the fighting now spreading wider across the Middle East, including an attack on an Egyptian port. The renewed hostilities kept the Strait of Hormuz largely closed, with few ships passing through, sustaining upward pressure on energy prices and keeping geopolitical risk elevated across markets."

Nifty outlook

From a technical standpoint, Rupak De, Senior Technical Analyst at LKP Securities, stated, "Nifty remained largely range-bound as the index failed to give a clear directional move. Sentiment is likely to remain positive in the short term, with the potential to rise towards 24,500. On the lower end, immediate support is placed at 24,200, below which the index might lose its current momentum."