Nifty hits 2-month high on trade deal hopes, GST reforms; will the rally sustain?

Indian equity indices surged on Tuesday, with benchmark Nifty50 scaling fresh two-month highs amid optimism over a potential India–US trade deal, expectations of a US Federal Reserve rate cut and GST reforms.

The 30-share BSE Sensex pack jumped 595 points or 0.73 per cent to close at 82,381, while the broader NSE Nifty index surged 170 points or 0.68 per cent to settle at 25,239. Buying interest was seen in large-cap counters such as L&T, Kotak Bank, M&M, Maruti, TCS and NTPC, Motilal Oswal Financial Services Ltd (MOFSL) said in its post-market roundup.

Sectorally, autos led the rally with the Nifty Auto index rising 1.4 per cent on GST reforms and hopes of festive demand recovery, driven by gains in Maruti, Eicher Motors, Hyundai Motor and M&M. Realty, IT, metals, and oil & gas indices also gained up to 1 per cent. IT stocks advanced on optimism around trade talks, with Persistent Systems, Coforge, HCL Tech and Oracle Finance rising 1–2 per cent. Realty majors, including DLF, Prestige, Lodha and Godrej Properties, added 1–2 per cent.

On the technical front, MOFSL noted that Nifty formed a bullish candle on daily charts. "It has to hold above 25,150 level for an upmove towards the 25,350–25,500 zone, while supports can be seen at 25,150 and then 25,050 zones," the brokerage said.

Echoing the positive sentiment, Nandish Shah, Deputy Vice-President at HDFC Securities, highlighted that after a brief pause, the Nifty resumed its upward momentum.

On the broader markets, the Nifty Midcap 100 index rose 0.54 per cent and the Nifty Smallcap 100 index surged 0.95 per cent, marking the eighth straight session of gains. Market breadth remained positive, with a BSE advance-decline ratio of 1.61.

Meanwhile, the Indian rupee strengthened for the third straight session, appreciating 16 paise to close at 88.05 per dollar. A weakening US Dollar Index, strong domestic equities and optimism over trade negotiations with the US supported the local currency.

Shah added that the technical trend remains bullish as the Nifty is trading above its 20-, 50-, 100-, and 200-DEMA levels. He pegged immediate support at 25,000, while resistance could emerge in the 25,420–25,500 zone.