Both benchmarks surged as much as 1.5% earlier in the day, helping the Nifty cross the 25,000 mark briefly but gave up part of the gains at close in the face of uncertainties. The NSE Nifty finished at 24,876.9, up 1% or 246 points. The BSE Sensex ended at 81,273.7, up 0.8% or 676 points.
“Gains in the market were led by short covering across beaten down sectors like auto and FMCG, as the GST-related benefits are expected to accrue in these sectors,” said Pankaj Pandey, head of retail research, ICICI Direct. “Foreign investors were negative on these consumption-based sectors recently.”
Agencies Maruti Suzuki Top Gainer on Nifty
The Nifty Auto Index soared 4.2%, while consumer durables and fast-moving consumer goods (FMCG) indices climbed 3.4% and 1.2%, respectively. The Nifty Realty Index gained 2.2%.
Consumption-based stocks led the rally, with auto giant Maruti Suzuki emerging as the top gainer on the Nifty as it surged 8.9% on Monday, amid the likelihood of lower GST on small cars. Hero MotoCorp and Nestle jumped 6% and 5.2%, respectively.
“The GST rationalisation news has provided the market with a much-awaited pullback trigger,” said Ruchit Jain, head of technical research, Motilal Oswal Financial Services. “In July and the first half of August, markets witnessed price-wise correction and moved closer to the 200 DMA (day moving average) while FPIs were heavily short on the Nifty.”Foreign portfolio investors (FPIs) purchased shares worth a net Rs 550.9 crore on Monday. Their domestic counterparts also bought shares worth Rs 4,103.8 crore. So far in August, global investors have dumped shares worth Rs 18,315.9 crore.Jain expects the current momentum to carry the Nifty toward 25,200-25,250 levels in the near term.The Volatility Index or VIX-the market’s fear gauge-dropped 0.1% to almost 12.34 on Monday. This suggests the risk perception is yet to ease as traders are awaiting more indicators before lowering their guard.
The Nifty Midcap 150 and Smallcap 250 indices gained 1.2% and 1.3%, respectively, on Monday. In the past week, the midcap and smallcap indices advanced 1.4% and 1.6% each.
Of the 4,365 shares traded on the BSE, 2,499 advanced, while 1,696 declined.
Analysts said the government’s efforts to boost consumption along with uncertainty in the US is expected to sharpen investor focus on the shares of domestic companies. “The uncertainty on the Trump front is expected to continue due to his volatile behaviour but could remain relegated to the US-facing sectors like IT and pharma,” said Pandey. “The positive momentum driven by the spark in domestic consumption-based themes is likely to continue.”
Elsewhere in Asia, China gained 0.9% while Japan and Taiwan rose 0.8% and 0.6%, respectively. However, South Korea fell 1.5%. Hong Kong and Indonesia declined 0.4% each.