India’s equity benchmarks advanced sharply on Monday with the benchmark NSE Nifty 50 index briefly surging past the psychologically significant 26,000 threshold and recording a firm finish ahead of the October F&O expiry. Softer-than-expected US consumer inflation data fuelled expectations of a potential Fed rate cut this week and optimism over progress in US-China trade bolstered investor sentiment.
The BSE Sensex gained 566.96 points, or 0.67%, to close the Monday session at 84,778.84, while the Nifty50 advanced 170.9 points, or 0.66%, to settle at 25,966.05. Meanwhile, gold prices declined as demand for safe-haven assets faded. Comex Gold slipped 1.70%, while MCX Gold saw a drop of 1.20% on Monday.
"Easing global headwinds, coupled with strong domestic reforms, provided cues for domestic earnings growth and justified the current premium valuations," said Vinod Nair, Head of Research, Geojit Investments. On the broader market front, the Midcap index climbed 0.9%, and the Small-cap index added 0.8%. Sectorally, barring media, pharma & healthcare, all indices closed higher, with notable strength of 1–2% seen in metal, PSU bank, oil & gas, and realty spaces.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said that the US Federal Reserve could cut interest rates by another 50 basis points before the year end. The upbeat global cues provided a strong backdrop for domestic equities, helping markets extend their gains through the session, he added.
“Talking about crucial levels, the zone of 26070-26100 (for Nifty50) will act as a crucial hurdle for the index. Any sustainable move above 26100 will lead to a sharp upside rally up to the 26250 level. While, on the downside, the zone of 25830-25800 will act as important support for the index,” he stated.
SBI Life Insurance, Bharti Airtel, Reliance Industries, SBI and Eternal were among the top gainers in the Nifty50 pack while the major laggards were Bharat Electronics, Kotak Mahindra Bank, Infosys, Adani Ports and Bajaj Finance.
Vishnu Kant Upadhyay, AVP of Research & Advisory, Master Capital Services, said that reports of advancing U.S.-India negotiations toward a tariff-reduction pact have ignited hopes for smoother export pathways. “This comes alongside positive US-China dialogue. Amid better-than-expected Q2 earnings, growing optimism about the India-US trade deal, and value buying in large-cap stocks, the Nifty50 is likely to trade firm with potential upsurge towards 26300-26500,” added Upadhyay.
Commenting on the gold price, Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said that the yellow metal extended its weakness, declining by Rs 1,550 to Rs 1,21,900, as optimism over a potential US-China trade deal encouraged continued profit booking in bullion. He added that easing of global uncertainty has led to a temporary cooling in safe-haven demand, though traders remain cautious ahead of key US inflation data and further updates on trade negotiations.
Trivedi expects gold prices to remain volatile with support near Rs 119,500 and resistance around Rs 124,500.
