Nifty gains 600 pts in six sessions, does this rally have more legs?

The benchmark Nifty climbed for the sixth straight session on Wednesday powered by a rally in auto and IT stocks. The ongoing trade talks between US and China also kept market sentiment positive in today's trade. The 50 stock index has gained 600 pts in six sessions. Sensex rose 123 pts to 82,515 and Nifty gained 141 points to 25,141. Market cap of BSE-listed firms climbed to Rs 455.57 lakh crore today against Rs 455.41 lakh crore on Tuesday. 

Top gainers on Sensex were HCL Tech, Infosys, Tech Mahindra, Reliance, Bajaj Finserv and ICICI bank shares rising up to 3.22%. PowerGrid, Adani Ports, IndusInd Bank, HDFC Bank, HUL and Bajaj Finance were the top losers on Sensex, falling up to 1.89%. 

Rupak De, Senior Technical Analyst at LKP Securities said, "The Nifty remained volatile throughout the day before closing flat. However, the overall sentiment remains positive as the index continues to hold above the breakout point. Additionally, a golden crossover is in place, which supports the bullish outlook. Any dip should be viewed as a buying opportunity. Crucial support is placed at 24,850. As long as the index holds above this level, the trend is likely to remain positive, with potential to move towards 25,350 in the short term."

BSE midcap and small cap indices ended 57 pts lower and 30 pts higher, respectively.

In terms of sectors, BSE IT and oil and gas indices climbed 471 pts and 502 pts, respectively in the current session. 

Praveen Dwarakanath, Vice President of Hedged.in said, "Nifty formed a spinning top type candle near its resistance of 25200 level, indicating rejection from the resistance. The index rose above the upper Bollinger band, but could not sustain the level, indicating weakness in the index. The stochastics has moved to the over-bought region, indicating a small reversal, one can look to sell the index on the rise. Immediate support for the index is at 24800, likely to move towards this level, before the next rally to come." 

Meanwhile, market breadth was positive with 2227 stocks ending higher against 1821 stocks falling on BSE. 132 shares were unchanged. 

Vinod Nair, Head of Research, Geojit Investments said, "Profit booking continues in the broader markets, driven by elevated domestic valuations. However, large-cap resilience is supporting the indices, with institutional investors favouring companies with stable earnings outlooks. The Auto and IT sectors remain in focus—Auto stocks are gaining on improved monthly sales, while IT are benefiting from optimism around a potential US-China trade resolution. Meanwhile, following the recent rally, the market lacks clear direction as investors await key macroeconomic data and updates on trade negotiations. US inflation data, due later today, is expected to show a slight uptick, driven by recent tariff increases."

Foreign institutional investors (FIIs) bought shares worth a net Rs 2301.87 crore on Tuesday, according to data available with the BSE. DIIs also purchased shares worth Rs 1113.34 crore. 

Previous session 

Sensex declined by 53.49 points or 0.06% to settle at 82,391.72, and the Nifty gained 1.05 points to end at 25,104.25, marking its fifth straight day of gains. Sensex snapped four-day rally in the previous session.