Final Trade: Senses off days' high, rises 455 pts; Nifty closes at 25,001 as auto, IT stocks lead rally

Indian equity markets closed sharply higher on Monday, May 26, as bulls dominated Dalal Street for a second consecutive session. The rally was led by strong buying in auto and IT sectors, supported by favourable global cues, early monsoon progress, and firm domestic macros.

The BSE Sensex jumped 455.37 points or 0.56 per cent to close at 82,176.45, while the NSE Nifty ended at 25,001.15, up 148 points or 0.60 per cent, breaching the psychological 25,000 mark for the first time ever.

Among sectors, Nifty Auto and Nifty IT gained one per cent each, driven by strong momentum in stocks like Mahindra & Mahindra, Tata Motors, Infosys, and HCL Tech. Positive outlook on auto sales and digital transformation plays in IT kept investor interest strong.

Other sectors such as metals, realty, energy, commodities and PSU stocks also saw healthy gains, contributing to the overall market strength.

The rally wasn’t restricted to largecaps alone. The Nifty Midcap 100 rose 0.67 per cent to 57,067.25, while the Nifty Smallcap 100 added 0.37 per cent to 17,707.80, indicating strong investor interest in broader markets.

Global cues 

Globally, investor sentiment got a boost from reports suggesting the US may extend tariff deadlines on European imports, hinting at progress in trade talks. Additionally, the dollar index fell to 98.93, encouraging fund flows into emerging markets like India.

Early monsoon, soft bond yields aid domestic mood

Back home, the early arrival of the southwest monsoon and a dip in bond yields further bolstered confidence. According to Vinod Nair, Head of Research at Geojit Financial, these developments point to a pickup in rural demand, which could reflect in a stronger Q4 GDP reading.

Currency Update

The Indian rupee appreciated by 24 paise to close at 85.09 per dollar, tracking the weakness in the greenback and positive domestic cues.

According to Jateen Trivedi of LKP Securities, the rupee is expected to remain rangebound between 84.50 and 85.25, with key US economic data lined up during the week.

Key triggers ahead

Investors will closely track a slew of US macroeconomic releases this week, including Durable Goods Orders, Q1 GDP data, FOMC Meeting Minutes, and the Core PCE Price Index, all of which could influence foreign fund flows and currency moves.

Domestically, all eyes are now on India's Q4 GDP numbers, monsoon progress, and any fresh cues from corporate earnings before the new series kicks in later this week.