Sensex ends nearly 400 points higher, Nifty above 25,900

The S&P BSE Sensex was down 384.30 points at the closing bell, while the NSE Nifty50 gained 148.10 points to settle at 25,939.05.

In Short

• Sensex, Nifty gain sharply as bull run continues on Dalal Street
• PSU Bank, Realty sectors lead market gains; IT declines
• Higher foreign inflows expected after US Federal Reserve rate cut

Benchmark stock market indices ended Monday’s trading session on a positive note, backed by expectations of increased foreign inflows, following the US Federal Reserve’s bigger-than-expected rate cut.

The S&P BSE Sensex was down 384.30 points at the closing bell, while the NSE Nifty50 gained 148.10 points to settle at 25,939.05.

Most of the broader market indices also ended the trading session on a positive note even as volatility witnessed a sharp spike.

All the major sectoral indices were trading in positive territory, with Nifty PSU Bank and Nifty Realty emerging as the top gainers. Only Nifty IT ended the day in negative territory.

The top five gainers on the Nifty50 were Bajaj Auto, M&M, ONGC, Hero MotoCorp, SBI Life.

On the other hand, the top losers were Eicher Motors, ICICI Bank, Divi’s Lab, Wipro and IndusInd Bank.

Vinod Nair, Head of Research, Geojit Financial Services, said, "The euphoria from the FED rate cut continued to lift the domestic market. The benign input costs and an expectation of a change in stance by the RBI amid cuts by global banks will provide tailwinds to valuation."

"Though there is moderation in India PMI data, investors are anticipating that the wave of liquidity from FII may provide stability in the sentiment," he added.

Meanwhile, Amit Golia, Group CEO of MarketsMojo, discussed the implications of the US Federal Reserve's recent 50 basis point rate cut, viewing it as a pivotal shift in global monetary policy that impacted markets worldwide, including India.

He highlighted that sectors like real estate and infrastructure, which relied heavily on debt, stood to benefit from lower interest costs. Additionally, Indian non-banking financial companies (NBFCs) could have found opportunities for cheaper capital, while discretionary sectors such as automotive and FMCG also gained.

Golia pointed out that telecom companies might have seen improved profitability due to reduced debt burdens amid ongoing 5G rollouts. However, he cautioned investors about potential challenges for IT and pharmaceuticals, which had high US dollar revenue exposure, as a depreciating dollar could have lowered their sales in INR terms.

"Indian market valuations are already elevated, suggesting that the potential benefits of a rate cut have largely been priced in. As a result, expecting substantial returns from investments in rate-sensitive stocks may no longer be a viable strategy. India's growth narrative remains robust, reflected in the markets commanding some of the highest valuations globally," Golia noted.

"Retail investors should focus on selecting promising companies in the right sectors and hold their positions for the long term."