Sensex gains 490 pts, Nifty nears 25,250: Here's why markets are up today

Stock market today: All sectoral indices were trading in the green territory. Nifty Auto index came out on top, up by 1.55 per cent, quoting 23,917

Stock market today: Equity benchmark indices witnessed a sharp surge on Tuesday, snapping their over a week long consolidation phase. Investor sentiment turned bullish as the retail inflation figure dropped to a 6-year low, raising bets of a status quo on repo rate by the Reserve Bank of India (RBI) 

 

At 11:45 AM, BSE Sensex was trading at 82,673.58, up by more than 400 points or 0.51 per cent. The index hit an intraday high of 82,744, up 490 points.  The Nifty50, meanwhile, was trading above 25,200 level, up by 137 points or 0.55 per cent. It hit an intraday high of 25,245.

 

 

Nearly all stocks from the Sensex pack were trading in green. Sun Pharma, Mahindra and Mahindra, Infosys, Tata Motors and Bharti Airtel were among the top gainers. On the other hand, HCL Tech, Eternal (Zomato), Tata Steel. UltraTech Cement and Axis Bank were among the top losers.  CATCH STOCK MARKET LIVE UPDATES TODAY 

The bullish sentiment was more noticeable in the broader markets. The Nifty Midcap 100 was trading at 59,445, up by 0.69 per cent. Whereas, the Nifty Smallcap 100 rose by 0.76 per cent, quoting 19,099.

 

All the sectoral indices were trading in the green territory. The Nifty Auto index was on the top, up by 1.55 per cent, quoting 23,917. The Nifty PSU Bank index followed suit and surged over 1.06 per cent, trading at 7,151.

 

While earnings for the first quarter of the financial year 2025-26 (Q1FY26) will continue to provide directional momentum to markets ahead, here is why Sensex, Nifty are rising today:

CPI at 6-year low

The June CPI inflation figure dropped to a 6-year low level of 2.10 per cent. The steep decline in the figure was mainly owing to two reasons: favourable base effect and food inflation taking a breather. This, analysts said, might raise expectations of a further rate cut after the Reserve Bank of India (RBI) slashed rates by 50 basis points (bps) in a surprise move during the last monetary policy committee (MPC) meet.

 

"A significant macro trend is the decline of CPI inflation in June to 2.10 per cent. It appears that inflation will undershoot RBI's projection of 3.7 per cent CPI inflation for FY26. This has raised rate cut hopes. But now the question is whether another 25 bps rate cut stimulate credit growth which is languishing at around 9 per cent," said VK Vijayakumar, chief investment strategist at Geojit Investments Limited. 

Strong buying in SMIDs

While the benchmark indices witnessed a robust buying spree on Tuesday, smallcap and midcap stocks experienced a sharper uptrend. For instance, the BSE Smallcap index reached a 6-month high on Tuesday, gaining over 30 per cent from the year-to-date (YTD) low levels. The strong investor interest in the smallcap and midcap segment was also visible in net inflows recorded in June month. 

 

Equity mutual funds witnessed a strong resurgence in June, with net inflows rising sharply to ₹23,568 crore from ₹18,994.56 crore in May. According to Dikshit Mittal, senior fund manager-equity at LIC Mutual Fund Asset Management, this momentum was largely driven by strong inflows into the midcap and smallcap segments, signalling growing investor confidence in India’s long-term growth prospects, even amidst global headwinds.

 

US-India trade deal

Anticipations around a prospective trade deal between the US and India ahead of the August 1 deadline are also gaining momentum. As per reports, the interim trade deal can bring down the proposed tariff rate below 20 per cent. "The US is working toward an interim trade deal with India that may reduce its proposed tariffs to below 20 per cent," a report by Bloomberg said.