Markets rebound after five-day decline; auto sector lags on GST news 

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Markets bounced back on Monday after five consecutive sessions of losses, with the BSE Sensex rising 498.58 points to close at 78,540.17, and the NSE Nifty gaining 165.95 points to end at 23,753.45, driven by positive global cues and lower-than-expected US inflation data.

The market opened significantly higher, with the Sensex starting at 78,488.64 and the Nifty at 23,738.20, tracking gains in US stocks after Friday’s favourable Personal Consumption Expenditures (PCE) index data sparked hopes for potential rate cuts in 2025.

Among sectoral indices, Realty emerged as the top performer with a 1.50 per cent gain, while the banking sector showed strength with Nifty Bank advancing 558.40 points or 1.10 per cent to close at 51,317.60.

However, the auto sector faced pressure following the GST Council’s announcement of an 18 per cent tax on all used vehicle sales, including electric vehicles, by registered sellers.

JSW Steel led the gainers on the NSE, rising 2.36 per cent, followed by ITC at 2.12 per cent, Hindalco at 1.87 per cent, Trent at 1.73 per cent, and HDFC Bank at 1.72 per cent.

On the losing side, Hero MotoCorp declined 1.50 per cent, Maruti Suzuki fell 0.84 per cent, HCL Tech dropped 0.55 per cent, HDFC Life decreased 0.53 per cent, and Bajaj Finserv slipped 0.43 per cent.

Market breadth remained negative, with 2,452 stocks declining against 1,636 advances on the BSE. The session saw 212 stocks hitting 52-week highs and 93 touching 52-week lows, while trading volumes on NSE were 22 per cent lower compared to the 10-day average, marking the lowest since October 11, 2024.

Vinod Nair, Head of Research at Geojit Financial Services, noted, “The Indian market demonstrated optimism following the recent sell-off. The lower-than-expected US PCE print bolstered investor sentiment in interest rate-sensitive sectors.”

Insurance stocks faced pressure after the GST Council deferred its decision on reducing tax rates for life and health insurance plans. Meanwhile, ITC gained following no announcement on tobacco product tax rate hikes, contrary to market expectations.

Technical analysts pointed to key levels for the market. “For traders now, 23650 and 23550 will act as key support zones, while the 200-day SMA or 23850 and 24000 could serve as key resistance areas for the bulls,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.

The broader market underperformed the benchmarks, with the Nifty Midcap Select rising 0.57 per cent to 12,756.05 and the Nifty Next 50 gaining 0.27 per cent to close at 68,888.95. The volatility index, India VIX, cooled off by 10.30 per cent to 13.52 levels.

Devarsh Vakil, Deputy Head Retail Research at HDFC Securities, highlighted that “NSE cash market volumes were lower by 22 per cent as compared to average of last 10 days and lowest since 11-Oct-2024,” adding that the Nifty Small cap 100 index has reached a strong support level after completing a 50 per cent retracement of its rise from November lows.

Looking ahead, Ajit Mishra, SVP Research at Religare Broking Ltd, advised, “Participants are advised to maintain a cautious stance with a negative bias on the index until clear signs of a rebound emerge. However, individual stocks continue to present opportunities on both sides.”