Sensex, Nifty end higher led by auto and financial; Paytm shares jump 16%

The S&P BSE Sensex added 584.81 points to end at 81,634.81, while the NSE Nifty50 gained 217.40 points to close at 25,013.15. 

In Short

• Sensex rose 584.81 points; Nifty gained 217.40 points
• Paytm shares turn positive for first time this year, up 15%
• Nifty Metal was the only sector to decline by 0.93%

Benchmark stock market indices closed higher on Tuesday, ending their six-day losing streak led by a rally in auto and financial stocks.

The S&P BSE Sensex added 584.81 points to end at 81,634.81, while the NSE Nifty50 gained 217.40 points to close at 25,013.15.

Shares of One97 Communications, the parent firm of payment aggregator Paytm, surged over 15% on Tuesday, making it the company's biggest single-day rise since February 8, 2023. With this increase, the stock has moved into positive territory for the year, posting gains of 12% in 2024 so far.

Mr. Vaibhav Vidwani, Research Analyst, Bonanza said that Sensex and Nifty closed on positive note, on the back of election results which supported PSU stocks and brought optimism in the market.

"Investors are likely to stay on the sidelines ahead of local quarterly earnings reports, Reserve Bank of India rate decision and middle east crises. Shares of metal companies, including NMDC, NALCO, Tata Steel, and JSW Steel, fell by 3-5% today after China's state planner unveiled an economic roadmap that lacked significant stimulus measures, disappointed investors and attracted pessimism in the sector," he added.

Barring one sector, all of them closed in green.

The media sector led the gains, with Nifty Media surging by an impressive 3.11%. The banking and financial services sector also performed strongly, with Nifty Bank rising 1.07%, Nifty Financial Services up 1.00%, Nifty Financial Services 25/50 gaining 0.92%, Nifty PSU Bank increasing by 1.35%, and Nifty Private Bank up 0.99%.

Other sectors also saw significant gains. Nifty Auto rose by 1.66%, while Nifty Healthcare Index climbed 1.72%. Nifty Pharma increased by 1.44%, and Nifty Oil & Gas saw a rise of 1.27%. Nifty Realty gained 0.96%, Nifty Consumer Durables went up by 0.78%, and both Nifty FMCG and Nifty IT showed modest gains of 0.47% each.

The only sector that faced a decline was Nifty Metal, which dropped by 0.93%.

Ajit Mishra – SVP, Research, Religare Broking Ltd said that the market remained under pressure and extended its corrective phase, losing nearly a percent.

"After a brief initial uptick, selling pressure in heavyweight stocks across sectors dragged the Nifty down, closing at 24,795.75. Except for the IT sector, all major sectors followed the benchmark trend and ended in the red, with energy, metals, and banking being the top laggards. Broader indices also took a hit, declining between 2% and 2.5%," he added.

The Nifty Midcap100 index posted a gain of 2.16%, while the Nifty Smallcap100 index also showed impressive strength, rising by 2.05%. The volatility index (VIX), commonly known as the fear index, dropped by 3.26%.

"Despite the resilience in U.S. markets, it hasn't provided much relief amid continued foreign investor selling. Looking ahead, the Nifty needs to sustain above the 24,750 mark for any potential rebound or consolidation. Otherwise, participants should brace for the next key support at the 100-day exponential moving average (DEMA), currently around 24,380. In this scenario, it’s advised to closely monitor leveraged positions and adopt a stock-specific approach, with preference for short trades on bounce," said Mishra.