Indian benchmark indices extended their winning streak on Tuesday, with the BSE Sensex climbing 450 points (0.56%) to 80,699.04 and the Nifty50 gaining 126 points (0.52%) to trade at 24,402.
This marks the third consecutive session of gains, spurred by a rally in metal and financial stocks.
The uptick followed positive cues from Asian markets and rising expectations of a 25-basis-point rate cut by the US Federal Reserve later this month.
Notable gainers included Adani Ports, JSW Steel, SBI, HDFC Bank, IndusInd Bank, and Tata Steel, which rose up to 3%.
However, ITC, Bharti Airtel, Sun Pharma, Kotak Bank, and M&M opened lower.
Swiggy and Solar Industries shine
Solar Industries surged 9.5% after securing export orders worth ₹2,039 crore for advanced defense products. By 11:03 am, it was trading up by 0.75%.
Swiggy shares jumped 9.4% ahead of its Q2 financial results announcement for the September-ended quarter, before giving up gains, and were up by 2.97% at 10:58 am IST.
Pricol gained nearly 6% after announcing its acquisition of the plastic component division of TVS Motor’s arm, Sundaram Auto Components, for ₹215 crore before losing gains and trading at an increase of 1.36% at 11:00 am IST.
On the sectoral front, the Nifty PSU index surged 2.43%, led by Union Bank, PSB, Bank of Baroda, and Canara Bank.
Other indices such as Nifty Bank, Financial Services, Metal, Media, and Realty rose between 0.5% and 1.5%.
ITC, other cigarette stocks fall on report of GST hike on cigarettes
Shares of major cigarette companies, including ITC, Godfrey Phillips, and VST Industries, slid up to 3% following the recommendation by the Group of Ministers (GoM) on GST rate rationalization to increase the tax on sin goods.
The proposed hike would raise GST on products like cigarettes, tobacco, and aerated beverages from 28% to 35%.
ITC’s stock dropped 3% to hit a day’s low of ₹462.80, while VST Industries declined 2.3% to ₹318.30. Godfrey Phillips saw the steepest fall, losing 3.2% to trade at ₹5,575.50 on the Bombay Stock Exchange (BSE).
The move to raise GST on sin goods is expected to impact profitability in the sector, leading to bearish investor sentiment.
Analysts’ take
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributed the market’s upward momentum to optimism over policy responses to slowing GDP growth.
“Banking stocks rebounded yesterday, signaling expectations of a CRR cut on Friday, which could boost bank profitability. However, the net FII sell figure of ₹238 crore yesterday includes large bulk deals and does not paint a complete picture,” Vijayakumar explained.
Mandar Bhojane of Choice Broking noted bullish signals for the Nifty 50.
Immediate support is placed at 24,000 and 23,900, while 24,350 serves as the first hurdle. A decisive breakout above this level could drive the index toward 24,800 and 25,000, unlocking significant upside potential, he said.
Rupee under pressure
The Indian rupee (INR) depreciated further, falling by 4 paise to 84.76 against the US dollar in early trade.
This follows Monday’s all-time low, driven by disappointing macroeconomic data and persistent foreign fund outflows.
The dollar index rose 0.08% to 106.53, supported by robust US economic data.
The rupee’s downside, however, might be limited due to routine intervention by the Reserve Bank of India (RBI).
Concerns over potential tariffs have also contributed to pressure on the rupee.
US President-elect Donald Trump recently threatened 100% tariffs on BRICS nations if they act to undermine the US dollar.
FII/DII activity shows mixed trends
On December 2, Foreign Institutional Investors (FIIs) sold equities worth ₹238 crore, while Domestic Institutional Investors (DIIs) offset this with net buying of over ₹3,588 crore.
This divergence reflects underlying caution among foreign investors despite domestic buying interest.
Global cues and key events ahead
Traders are keeping a close watch on the US JOLTS Job Openings data for October, which is due later on Tuesday.
Comments from US Federal Reserve officials Adriana Kugler and Austan Goolsbee are also expected to provide further clues on policy direction.
Domestically, the Reserve Bank of India’s (RBI) upcoming interest rate decision on Friday, alongside US Nonfarm Payrolls data for November, will be key determinants for market sentiment.
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