Sensex, Nifty trade higher with notable gains on bargain hunting

Indian equity benchmarks made a positive start of a holiday shortened week after a sharp correction last week, as investors sentiment remained weak due to U.S. President Donald Trump's tariff policies on pharma and their impact on India. Sensex and Nifty were trading higher with notable gains in early deals on Monday on account of bargain hunting following recent sell-off. Also, strong global cues and new developments around the India-U.S. trade talks, supported domestic indices. Market participants are now keeping close eye on the Reserve Bank of India’s Monetary Policy Committee meeting, which is going to start later in the day. A SBI research report has pitched for a 25-bps rate cut, saying it is the best possible option for the RBI as retail inflation is expected to remain benign even in the next financial year. Some support came as the Finance Ministry said that recent GST rate cuts will help lower inflation over the next year and also bring a further upside bias to the country's growth prospects. Meanwhile, investors are eyeing IIP data to be out later in the day for more directional cues.

On the global front, Asian markets were trading mostly higher, following the broadly positive cues from Wall Street on Friday, amid increased confidence the US Fed will continue lower interest rates in the coming months after data showed US consumer price inflation rose in line with street estimates in August.

The BSE Sensex is currently trading at 80707.46, up by 281.00 points or 0.35% after trading in a range of 80448.60 and 80745.45. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.68%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.53%, PSU up by 1.27%, Energy up by 1.17%, Capital Goods up by 1.16% and Realty up by 1.04%, while FMCG down by 0.31% was the sole losing index on the BSE.

The top gainers on the Sensex were Bharat Electronics up by 2.30%, Sun Pharma up by 1.98%, Eternal up by 1.81%, Titan Company up by 1.42% and Bajaj Finance up by 1.26%. On the flip side, Hindustan Unilever down by 1.66%, Axis Bank down by 1.59%, Larsen & Toubro down by 0.86%, Maruti Suzuki down by 0.62% and Bharti Airtel down by 0.30% were the top losers.

Meanwhile, Crisil Intelligence in its September report has said that high tariffs imposed by the United States (US) on Indian goods pose a major risk to the country's growth. It added that the tariffs will impact both Indian goods exports and investments. However, it noted that domestic consumption, driven by benign inflation and rate cuts, is expected to support growth.

The country's GDP rose to a five-quarter high of 7.8 per cent in the first quarter of fiscal 2025-26, up from 7.4 per cent in the similar quarter in the previous year. Nominal GDP growth, however, slowed to 8.8 per cent from 10.8 per cent during the same period. The report said consumer price index (CPI) inflation is likely to soften to 3.5 per cent in the current fiscal from 4.6 per cent in the previous year. Healthy agricultural growth is expected to keep food inflation under check, though the impact of excess rain was yet to be fully assessed.

As per the report, lower crude prices and benign global commodity prices are expected to contain non-food inflation. On the monetary policy, it said the Reserve Bank of India (RBI) is likely to implement one more rate cut this fiscal, followed by a pause. The central bank's monetary policy committee had cut the repo rate by 100 basis points between February and June 2025 and is now awaiting the full transmission of past cuts.

The CNX Nifty is currently trading at 24744.55, up by 89.85 points or 0.36% after trading in a range of 24668.15 and 24755.80. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 2.35%, Sun Pharma up by 1.93%, Eternal up by 1.68%, Cipla up by 1.63% and Titan Company up by 1.62%. On the flip side, Axis Bank down by 1.78%, Hindustan Unilever down by 1.34%, Tata Consumer Products down by 1.05%, Maruti Suzuki down by 0.87% and Larsen & Toubro down by 0.84% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 349.8 points or 1.32% to 26,478.00, Jakarta Composite gained 48.27 points or 0.6% to 8,147.60, KOSPI increased 43.31 points or 1.26% to 3,429.36, Straits Times rose 6.99 points or 0.16% to 4,272.97 and Shanghai Composite was up by 4.79 points or 0.13% to 3,832.90. On the other hand, Nikkei 225 slipped 313.99 points or 0.69% to 45,041.00.