Sensex, Nifty Extend Gains for Second Day Driven by Auto Stocks

Indian stock markets saw continued positive momentum on September 17, marking the second consecutive day of gains, primarily led by the auto and telecom sectors. Investors are optimistic ahead of the US Federal Reserve’s monetary policy decision, expecting a potential 25 basis point interest rate cut.

Market Overview

At the close of the trading session, the Sensex rose by 80 points, or 0.1 percent, to finish at 83,068, while the Nifty gained 34 points, settling at 25,418.50. Despite the upward movement, market breadth showed a negative trend with 1,616 stocks advancing, 2,176 declining, and 99 stocks remaining unchanged.

Sectoral Performance

In terms of sectoral performance, telecom, auto, and construction stocks were the driving forces behind the gains. However, the broader market showed mixed results, with the BSE Midcap and Smallcap indices both declining by 0.1 percent. Meanwhile, India VIX, the volatility index, ticked up by 1 percent, settling at 12.6, reflecting some caution among market participants.

Key Insights from Analysts

Vinod Nair, Head of Research, Geojit Financial Services

According to Vinod Nair, the market maintained subtle positive momentum, driven by the anticipation of an interest rate cut from the US Federal Reserve. While a 25-basis-point cut seems to be priced in, investors are keenly watching the Fed’s comments on the state of the economy and the potential for future rate cuts. Strong institutional flows continue to support the Indian markets, with large-cap stocks in sectors like IT, FMCG, and private banks seeing notable interest.

Ajit Mishra, SVP, Research, Religare Broking

Ajit Mishra highlighted that the market remained relatively subdued for the third consecutive day, though it closed in the green. Despite the flat opening, the Nifty stayed within a narrow range, ultimately closing at 25,418.50. Gains were seen in realty and auto sectors, while metal and pharma stocks faced some pressure. The ongoing profit-booking in midcap and smallcap stocks contributed to the weaker market breadth.

He further advised that rotational buying in large-cap stocks kept the tone positive. Mishra recommended a buy-on-dips strategy, targeting 25,550 as a potential upside for the Nifty. Sectors like banking, financials, realty, and IT are presenting stock-specific opportunities for investors.

Shrikant Chouhan, Head of Equity Research, Kotak Securities

Shrikant Chouhan noted that the benchmark indices remained range-bound, with the Nifty closing 34 points higher and the Sensex up by 105 points. Select auto stocks experienced buying interest, while the media sector was the top loser, shedding over 1 percent. Technically, the market traded above 25,350/83,900 for most of the day, and the positive consolidation on intraday charts signals further uptrend potential.

For trend-following traders, Chouhan emphasized the importance of key support levels at 25,350/83,900 and 25,300/82,700. As long as the market stays above these levels, the bullish trend is expected to persist, with potential gains toward 25,550-25,650/83,400-83,800.

Nifty 50 Outlook

The Nifty 50 continued its upward trend, albeit with moderate gains amid some volatility. After struggling for three days, the index finally closed above 25,400, which analysts believe is a crucial level for further movement. If the index sustains this level, the 25,500-25,600 zone could serve as the next area of resistance, with support in the 25,300-25,200 range.

Weekly Options Data

According to options data, the 26,000 strike saw the highest Call open interest, followed by 26,500 and 25,400 strikes. Maximum Call writing was observed at the 26,000 strike, while Put open interest was highest at the 25,000 strike, indicating support in that zone. This suggests that 25,400 is a key level to watch. If the Nifty moves above this, 25,800 may act as the next resistance, while support remains at 25,300.

Bank Nifty Outlook

The Bank Nifty maintained its higher highs-higher lows pattern for the fourth consecutive session, staying above 52,000 throughout the day. The index ended 36 points higher, closing at 52,189, despite forming a bearish candlestick on the daily chart.

According to Hrishikesh Yedve, AVP at Asit C Mehta Investment Intermediates, the Bank Nifty remains strong as long as it stays above 51,700-51,750. If it holds these levels, the index could test 52,800-53,000 in the short term.

Conclusion

While the Sensex and Nifty extended their gains for a second straight day, market participants remain cautious ahead of the US Federal Reserve’s meeting, which is expected to result in a 25 basis point rate cut. The broader market remains mixed, with midcap and smallcap indices showing weakness. Investors are advised to adopt a pragmatic approach with proper risk management in place, particularly with the US Fed decision and domestic inflation data on the horizon.

Tags: Sensex, Nifty, stock market, auto stocks, telecom stocks, US Federal Reserve, rate cut, India VIX, Nifty outlook, Bank Nifty, investment strategy, stock market volatility, large-cap stocks, September 17 stock market