Sensex jumps over 300 pts, Nifty tops 24,500 as IT stocks, banks advance on upbeat GDP, U.S. court's ruling

Indian benchmark indices Sensex and Nifty traded higher on Monday, buoyed by better-than-expected June-quarter GDP data and a U.S. court ruling that deemed most of President Donald Trump’s tariffs illegal but left them in place until mid-October.

The BSE Sensex advanced 333.94 points, or 0.42%, to open at 80,143.59, while the NSE Nifty jumped 84.45 points, or 0.35%, to open at 24,511.30.

On the 30-stock Sensex pack, the shares of Infosys, Power Grid, TCS, Tech Mahindra, Asian Paints and HCL Tech lead the gainers, advancing between 1% and 2%.

On a sectoral basis, IT firms, which earn a significant portion of revenue from the U.S., advanced with the Nifty IT index up 1.6%.

Financials also strengthened, with the Nifty Bank up 0.5% and the Nifty PSU Bank index gaining 0.8%.

Investor sentiment was supported by India’s April–June GDP growth of 7.8%, outpacing forecasts, though analysts cautioned that escalating U.S. tariffs could weigh on business activity in the coming quarters.

A divided U.S. appeals court ruled that most tariffs imposed under U.S. President Donald Trump were unlawful but allowed them to remain in place temporarily while the administration prepares an appeal to the Supreme Court. Trump had slapped 50% tariffs on Indian goods, among the steepest on any trading partner.

The Nifty 50 and Sensex still ended August lower for a second straight month, pressured by worries over the impact of U.S. trade measures on India’s growth and corporate earnings.

Market participants are also watching Prime Minister Narendra Modi’s visit to China, his first in seven years, for meetings at the Shanghai Cooperation Organisation alongside Russian President Vladimir Putin and other Asian leaders.

Expert Views

"Global geopolitics is transforming fast in response to Trump’s tantrums. The coming together of China, India and Russia can have profound consequences on global power equations and thereby on global trade. This will have its impact on the stock market too," said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, adding that there are two developments, one global and the other domestic, that can weigh on markets.

The U.S. court ruling that Trump’s tariffs are illegal is a big development and the U.S. Supreme Court’s final verdict on the issue will have to be awaited, said Vijayakumar, adding that domestically, India’s Q1 GDP growth number at 7.8% came much better than expected.

"It appears that the fiscal stimulus provided in the Budget and monetary stimulus provided by the MPC are acting with a lag. The proposed GST reforms can accelerate growth in the coming quarters. This, along with the huge liquidity coming into mutual funds will continue to support the market," said Vijayakumar.

On a technical basis, Anand James, Chief Market Strategist at Geojit Investments, said Nifty’s August low of 24,337 is at risk, with a break potentially exposing 24,077 and 23,860. Still, he noted that “the steep nature of recent declines raises the possibility of a mean reversion move higher,” if the index swings back above 24,350 or clears the 24,550–608 band.

Global Markets

Asian markets started the week on a softer note as profit-taking weighed on Japanese technology stocks, even as Chinese shares held firm on optimism surrounding domestic artificial-intelligence ventures.

Japan’s Nikkei dropped 2%, while South Korea’s benchmark slipped 0.7%. MSCI’s gauge of Asia-Pacific equities excluding Japan eased 0.1% after hitting a four-year peak last week, fueled by a rally in Chinese stocks. Chinese blue chips edged 0.2% higher, extending a 10% surge in August as ample liquidity chased returns in a low-yield environment.

The dollar and U.S. Treasurys came under pressure ahead of a data-heavy week featuring manufacturing and services surveys as well as labour-market reports, culminating in Friday’s August payrolls release.

In commodities, gold extended gains, rising 0.8% to a four-month high of $3,477 an ounce after climbing 2.2% last week, supported by a weaker dollar and expectations of lower interest rates.

FII/DII Tracker

On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth nearly Rs 8,313 crore on August 29, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 11,488 crore.

Crude Impact

Oil prices held in a narrow band on Monday as concerns over rising supply and the drag from U.S. tariffs on demand countered support from supply disruptions linked to intensified Russia-Ukraine airstrikes.

Brent crude slipped 12 cents, or 0.2%, to $67.36 a barrel in early Asian trading, while U.S. West Texas Intermediate eased 13 cents, or 0.2%, to $63.88. With U.S. markets closed for a bank holiday, trading volumes were expected to remain subdued.


Also read: Will it be another muted September for Dalal Street?

Rupee vs Dollar

The Indian rupee weakened further on Monday, slipping 17 paise to 88.26 against the U.S. dollar in early trade after breaching the 88-per-dollar mark last week, a move traders said has emboldened speculators to push the currency lower and kept downside risks in play.

The greenback, meanwhile, has come under pressure from political calls for faster rate cuts, leaving the dollar index pinned at 97.788 after a 2.2% drop in August.

(with inputs from agencies)