Sensex gains 876 pts in 2 days, Nifty tops 26,000; what’s next for stock market?

Domestic equity benchmarks Sensex and Nifty extended their gains for a second straight session on Friday, supported by strong momentum in metals stocks and value buying in heavyweights such as Tata Steel, Eternal and UltraTech Cement. Investors are now turning their focus to domestic inflation figures, which are due later in the day.

At the closing bell, the Sensex rose 449.53 points, or 0.53%, to settle at 85,267.66, extending its two-day gain to 876 points. The Nifty50 also climbed 148.40 points, or 0.57%, to finish at 26,046.95.

Tata Steel emerged as top gainer on the Sensex, rising 3.40% to Rs 172. Eternal followed with a 2.37% gain, while UltraTech Cement, L&T, Maruti Suzuki and Bharti Airtel advanced 2.35%, 1.60%, 1.51% and 1.46%, respectively. 

Five stocks, namely Bharti Airtel, L&T, Reliance Industries, Eternal and Tata Steel, contributed heavily to the Sensex’s gain.     

In the BSE 100 index, Cummins India, Federal Bank, Samvardhana Motherson International and Vedanta touched their respective 52-week highs during the session.

Among sectoral indices, the BSE Metal index climbed 2.58% to close at 34,896.58, while the BSE Oil & Gas also advanced 1.21% to settle at 27,976.91.

Overall, of the 4,356 actively traded BSE stocks, 2,589 closed higher, 1,597 declined, and 170 remained unchanged. During the session, 95 stocks touched their 52-week highs, while 96 fell to 52-week lows. Meanwhile, 217 scrips hit their upper circuits, and 144 were locked in lower circuits.

Vinod Nair, Head of Research at Geojit Investments, said the U.S. Federal Reserve’s rate cut has strengthened global risk appetite, improving liquidity sentiment and supporting gains in domestic equities. This uplift came even as the rupee touched a record low and foreign investors continued to pull out funds.

“Auto, Metals, Consumer Durables, and Realty led gains, while FMCG and PSU Banks underperformed. Broader indices are showing buying interest, bouncing back post recent consolidation. India’s November CPI, due today, is expected to stay within RBI’s comfort zone, reinforcing policy stability expectations. Near-term focus: rupee levels, FII flows, and trade talks, with global cues from BoJ (likely to hike), ECB, and BoE policy signals," Nair said.

“On the technical front, the Nifty has decisively crossed the immediate hurdle near 25,950, corresponding to the 20-DEMA, and holding above this level will be critical for extending the recovery and inch towards the record high again. We continue to advocate a stock-specific trading approach, with preference toward banking, auto, metal, and pharma pockets, while selectively exploring opportunities in other sectors. Although the broader markets are also recovering, traders should avoid averaging loss-making positions and instead use the rebound to trim exposure in underperforming counters, maintaining a strong focus on risk management," said Ajit Mishra, SVP, Research at Religare Broking Ltd.