Sensex rises 410 pts, Nifty50 tops 24,700 as banks, metal stocks advance

Indian benchmark indices Sensex and Nifty ended higher on Wednesday, with banking and metal stocks leading gains, while investors awaited updates from a Goods and Services Tax (GST) Council meeting expected to weigh rate cuts on several products.

The NSE Nifty advanced 135.45 points, or 0.55%, to finish at 24,715.05, while the BSE Sensex jumped 409.83 points, or 0.51%, to settle at 80,567.71.

On the 30-stock Sensex, Tata Steel, Titan, Mahindra & Mahindra, ITC and Eternal were among the top performers, climbing between 1% and 6%.

The Nifty Metals index led sectoral gains, rising 3.1%, as analysts at CLSA said steel prices in India are poised to strengthen, supported by global trends and seasonal demand. CLSA cited the impact of China’s “anti-involution” policy, aimed at curbing steel output, as a tailwind for Indian producers.

Tata Steel shares rose 6% and topped gains on both benchmarks.

Auto and consumer stocks each advanced roughly 0.7%, bolstered by expectations of consumption-supporting tax cuts at the ongoing GST Council meeting.

The IT index was the only major laggard, falling 0.7% after U.S. manufacturing data showed a sixth consecutive month of contraction in August, raising concerns for Indian IT firms, which derive a significant portion of revenue from the U.S.

Broader markets also gained, with small-cap and mid-cap indices up 0.9% and 0.7%, respectively.

Expert Views

Indian equities closed higher after a mixed start to the session, buoyed by expectations of a consumption-led stimulus from the potential GST slab rationalization, said Vinod Nair, Head of Research at Geojit Investments, adding that all categories of consumer-based sectors, like discretionary, durable and staples, continued to outperform.

"In the near term, market sentiment hinges on the outcome of the GST Council meeting, with traction on consumption-oriented stocks and sectors. Well, the expectations are very high, increasing the risk of disappointments, which can kickstart consolidation again," said Nair.

Global Markets

A global sell-off in long-term government bonds extended Wednesday, pushing Japanese borrowing costs to record highs amid concerns over debt sustainability and persistent inflation.

Spot gold surged to an all-time high of $3,546.99 as investors sought alternative safe-haven assets amid the retreat from traditionally low-risk government debt.

Equity markets in Europe and the U.S. remained resilient, with hopes for an imminent U.S. rate cut supporting sentiment. Europe’s Stoxx 600 was up 0.4% in early GMT trading, while S&P 500 futures gained roughly 0.4%.

In contrast, Japan’s Nikkei fell 0.69%, weighed down by worries over the country’s fiscal health and political stability after record budget requests from government departments. MSCI’s broadest Asia-Pacific index outside Japan dropped 0.4%.

U.S. manufacturing contracted for a sixth consecutive month in August, pressured by import tariffs, a report on Tuesday showed. Investors now turn to U.S. job data later this week—including nonfarm payrolls, job openings, and private payrolls, for guidance on the labor market, which is central to Federal Reserve policy decisions.

Markets are pricing in an 89% probability of a 25-basis-point rate cut later this month, according to Reuters.

Crude Impact

Oil prices dropped on Wednesday as markets awaited a weekend OPEC+ meeting, where producers are expected to weigh a possible increase in October output.

Brent crude fell $0.96, or 1.4%, to $68.18 a barrel by 0945 GMT. U.S. West Texas Intermediate (WTI) crude declined $1.02, or 1.6%, to $65.57 a barrel.

Rupee vs Dollar

The Indian rupee strengthened 0.1% to 88.07 per U.S. dollar on Wednesday, supported by robust local equities and a softer dollar.

The dollar index, which tracks the greenback against six major currencies, slipped 0.2% to 98.19.

(with inputs from agencies)