Sensex, Nifty climb to over two-month high as banks, autos lead gains

The stock market rose sharply on Tuesday, with benchmark indexes closing at their highest level in more than two months, lifted by financials and auto stocks, while gains in midcap and smallcap counters kept market breadth strong.

The blue-chip Nifty 50 index climbed 170 points to end at 25,239, while the S&P BSE Sensex jumped 595 points to 82,381. The Nifty Bank index advanced 260 points to 55,148, closing above the 55,100 mark for the first time in a month.

"The domestic market sustained its recovery trend, supported by favourable global cues on expectations of  ~25 bps rate cut in the forthcoming US Fed policy decision and renewed optimism surrounding the resumed India-US trade negotiations. Auto and consumer durable stocks outperformed, ahead of the rollout of new GST rates and festive-driven demand expectations. Going forward, investor attention will remain on trade discussions, while strong domestic macro fundamentals are expected to drive upward earnings revisions, supporting current valuations and mitigating downside risks," Vinod Nair, Head of Research, Geojit Investments Limited, said.

Broader markets moved largely in line with benchmarks, with the Nifty Midcap 100 index up 313 points to 58,800. Market breadth was firmly in favour of advances, with the advance-decline ratio at 2:1.

Except for FMCG, all sectoral indices finished higher. Automobiles were the top gainers, with Mahindra & Mahindra and Maruti Suzuki rising about 2% each as four-wheeler stocks extended their winning run. Banking heavyweights Kotak Mahindra Bank and Axis Bank added 2-3%, driving the financial pack higher.

Among individual movers, Chola Investment rose 4% on strong volumes, leading gains among select non-bank financial firms, while GMR Airports jumped 4% on positive management commentary. Amber Enterprises hit a record high on reports of a qualified institutional placement (QIP) launch, adding 2%.

Gold loan financiers Muthoot Finance and Manappuram Finance gained about 2% each, tracking record highs in domestic gold prices. Midcap IT firms Cyient and Persistent Systems also rose ahead of the U.S. Federal Reserve’s policy decision this week.

However, capital market-linked stocks BSE Ltd and Angel One shed 1% each in an otherwise strong session. Vodafone Idea saw profit booking, slipping 2% after recent gains.

Elsewhere, Redington hit the 20% upper circuit following large block deals, while Aegis Logistics surged 7% after a positive brokerage note.