Sensex rises 655 pts in 2 days, Nifty near 25,700; will stock market rally continue?

Domestic equity benchmarks Sensex and Nifty extended their winning streak for the second straight session on Tuesday, driven by strong gains in heavyweight counters such as Bharat Electronics (BEL), Adani Ports, and Mahindra and Mahindra (M&M), which helped offset selling pressure in Bajaj Finance and Bajaj Finserv.

At the closing bell, benchmark indices recovered early losses, with the Sensex rising 335.97 points, or 0.40 per cent, to finish at 83,871.32, extending its two-day rally to 655 points. The Nifty50 gained 120.60 points, or 0.47 per cent, to end at 25,694.95.

BEL emerged as the top gainer on the Sensex, climbing 2.52 per cent to Rs 427.20. Mahindra & Mahindra (M&M) followed with a 2.40 per cent rise, while Adani Ports, HCL Technologies, Eternal and Infosys gained 2.11 per cent, 1.78 per cent, 1.53 per cent, and 1.06 per cent, respectively.

Five stocks, namely, HDFC Bank, Bharti Airtel, ICICI Bank, Infosys and M&M, contributed heavily to the Sensex’s rise.              

Among sectoral indices, the BSE Auto index gained 1 per cent to end at 60,541.78, while the BSE IT index climbed 1.07 per cent to close at 35,341.65.

Overall, out of 4,363 actively traded stocks on the BSE, 1,958 ended higher, while 2,225 declined, and 180 closed unchanged. During the session, 110 stocks scaled their 52-week highs, whereas 172 slipped to 52-week lows. Meanwhile, 163 scrips were locked in their upper circuits and 203 in lower circuits. 

Vinod Nair, Head of Research, Geojit Investments Limited, said the domestic market opened on a subdued note amid concerns over potential implications of the Delhi explosion. 

“However, it recovered smartly and closed at the day’s high, supported by global cues as the U.S. Senate passed a bill to end the longest-ever federal shutdown. Importantly, the Q2 results season is nearing its end and is expected to conclude on a positive note, driven by better-than-expected performance by the broader market,” Nair said. 

“The rally was sustained by gains in IT, auto, metal, and FMCG sectors. Investors are now awaiting the upcoming domestic inflation data, with expectations of continued moderation due to a steady decline in food prices—raising prospects of further policy easing by the RBI. Looking ahead, earnings are expected to witness a robust rebound in the third quarter, underpinned by multiple domestic tailwinds, though much will depend on the successful finalization of a trade deal with the U.S," Nair added.

Ajit Mishra – SVP, Research at Religare Broking Ltd – said technically, the Nifty has reclaimed its short-term moving average, the 20-DEMA, around the 25,600 mark.

"Sustaining above this level could open the door for a move toward 25,800–26,000, while any weakness below it might trigger profit-taking. Continued resilience in banking majors along with strength in IT stocks provides comfort for a potential rebound. Traders are advised to maintain a stock-specific approach, emphasizing risk management and rotational opportunities across sectors amid the prevailing volatility," Mishra said.