Sensex and Nifty End Higher, Metal Stocks Lead Rally

Indian stock markets closed higher on Friday, reversing early-session losses and extending their winning streak for a second consecutive day. The rebound was led by strong gains in metal sector stocks, supported by optimism over a potential U.S. Federal Reserve rate cut, a weakening U.S. dollar, and stable global commodity prices.

The S&P BSE Sensex rose 223.86 points to settle at 81,207.17, while the NSE Nifty50 gained 57.95 points to end at 24,894.25.

What Drove the Rally?

Vinod Nair, Head of Research at Geojit Financial Services, explained that the positive sentiment was fuelled by a combination of global and domestic triggers:

1. Rate Cut Expectations – Anticipation of a U.S. Fed rate cut in October boosted investor sentiment.

2. Weakening Dollar – A softer dollar supported commodities, especially metals, leading to a rally in metal stocks.

3. Stable Base Metal Prices – Global metal prices held steady, further supporting the uptrend.

4. Domestic Consumption Play – Reforms, good monsoon outlook, and easing inflation are expected to lift consumer demand.

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Top Gainers and Losers

The session witnessed significant movement in key large-cap stocks.

Top 5 Gainers

• Tata Steel – up 3.40%

• Power Grid – up 3.15%

• Axis Bank – up 2.16%

• Kotak Mahindra Bank – up 1.84%

• Larsen & Toubro (L&T) – up 1.69%

Top 5 Losers

• Tech Mahindra – down 1.11%

• Maruti Suzuki – down 1.06%

• UltraTech Cement – down 0.85%

• Sun Pharma – down 0.53%

• ICICI Bank – down 0.51%

Midcap and Smallcap Outperformance

One of the notable features of today’s market action was the outperformance of mid-cap and small-cap indices compared to large caps.

• Nifty Midcap100 – gained 0.83%

• Nifty Smallcap100 – up 0.69%

• India VIX – fell 2.21%, signaling reduced volatility

Nair noted that investors are focusing on stock-specific opportunities in the mid- and small-cap space, expecting stronger Q2FY26 earnings growth compared to large-cap companies.

Sectoral Performance

Most sectoral indices ended in the green, led by Nifty Metal.

Clearly, metal, consumer durables, and oil & gas stocks were the biggest drivers of market gains, while healthcare, realty, and auto stocks dragged.

Key Highlights Driving Stocks

1. Metal Stocks Shine

   • Tata Steel’s strong rally of 3.4% lifted the entire sector.

   • Optimism in global commodity markets supported the uptrend.

2. Banking and Financials Stable

   • Axis Bank and Kotak Mahindra Bank gained over 1.5%, while ICICI Bank ended slightly lower.

   • Private banks showed resilience, supporting Nifty gains.

3. Technology and Auto Weaken

   • Tech Mahindra dragged IT stocks, closing down 1.11%.

   • Maruti Suzuki slipped 1.06% amid weak auto sales sentiment.

4. Infrastructure Boost

   • Larsen & Toubro (L&T) climbed 1.69%, reflecting strong order pipeline optimism and infra sector reforms.

Investor Sentiment and Outlook

Investor sentiment has turned cautiously optimistic:

• Positive Factors: Rate cut hopes, inflation moderation, festival demand, and improving global metal prices.

• Risks Ahead:

  • Global oil price fluctuations.

  • Geopolitical tensions that may affect capital flows.

  • Q2FY26 earnings season – results below expectations could dampen the rally.

Expert Takeaway

Market experts believe the rally could sustain in the near term, but investors must stay cautious.

• Short-Term Outlook: Supported by RBI’s stable policy, festive demand, and global tailwinds.

• Medium-Term Outlook: Depends on earnings season and how global central banks, especially the Fed, handle interest rate cuts.

Conclusion

Friday’s session showed resilience in Indian markets as both Sensex and Nifty overcame early losses to close higher. The rally was broad-based but led by metal and banking stocks, with mid- and small-cap segments outperforming.

While optimism over a Fed rate cut and stable commodity prices is fueling the momentum, markets remain sensitive to global events and domestic earnings. For now, the positive momentum looks set to continue, especially with the upcoming festival season tailwinds boosting consumption.