Market Wrap: SENSEX, NIFTY snap three-day losing streak led by auto, IT shares

The Indian equity benchmarks snapped their three-day losing streak on Monday, September 1, as investor sentiment turned positive on the back of better-than-expected first quarter economic growth data.

India's economy rose at 7.8% in April-June period, remaining the fastest growing major economy in the world. Positive outcome from meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping on the side lines of Shanghai Cooperation Organisation (SCO) summit also added to the positive sentiment.

The SENSEX rose as much as 597 points and NIFTY50 index touched an intraday high of 24,636.

The SENSEX ended 555 points higher at 80,364 and NIFTY50 index climbed 198 points to close at 24,625.

The Indian economy grew by 7.8% in the April-June quarter of the current financial year 2025-26, aided by a robust performance of the services sector, according to government data released on Friday.

The growth in real Gross Domestic Product (GDP) in Q1 of FY26 was higher than the 6.5% expansion recorded in the same period a year ago, the National Statistics Office (NSO) said in a statement.

Sentiment was also supported after Prime Minister Narendra Modi and Chinese President Xi Jinping on Sunday pledged to stabilise relations and prevent their differences from escalating into disputes, as the leaders of the world’s two most populous nations met on the sidelines of the SCO summit.

The talks, held on the sidelines of the summit in Tianjin, marked PM Modi’s first visit to China in seven years. Both leaders welcomed what they called a “positive momentum” in relations since their last encounter in Kazan in October 2024, and agreed that India and China should be seen as “development partners and not rivals,” according to a statement from India’s Ministry of External Affairs.

Buying was visible across board as thirteen of 15 major sector gauges compiled by the National Stock Exchange ended higher led by NIFTY Auto index's 2.8% gain. Auto stocks witnessed buying interest after most of the auto companies reported their August monthly sales numbers which were largely in line with estimates.

IT index climbed 1.6% after global capital markets and investment group CLSA said that its global macroeconomists are expecting 75 basis points (bps) in rate cuts in the US over the next 1-1.5 years, and that could lead to a 10%-15% increase in valuation multiples for Indian IT companies.

CLSA expects potential for discretionary demand revival in the real estate, utilities, materials, staples and energy sectors, and it remains positive on India’s IT sector on attractive valuations.

NIFTY Metal, PSU Bank, Private Bank, Realty, Oil & Gas and Consumer Durables indices also rose between 1-2%.

Broader markets also witnessed buying interest and outperformed their larger peers as NIFTY Midcap 100 index rose 1.97% and NIFTY Smallcap 100 index surged 1.57%.

Bajaj Auto was top gainer in the NIFTY50 index, the stock rose 4% to close at ₹8,978 after the automaker reported a 5% year-on-year (YoY) growth in total vehicle wholesales, including exports, at 417,616 units in August.

According to its regulatory filing, the Pune-based automaker had sold 397,804 vehicles in August 2024.

The company’s total domestic sales (including commercial vehicles), however, declined 8% to 232,398 units in August compared to 253,827 units sold in the corresponding month last year.

Mahindra & Mahindra, Hero MotoCorp, Eicher Motors and Tata Motors from the auto space were also among the top gainers in the NIFTY50 index.

On the flipside, Sun Pharma, ITC, Hindustan Unilever, Titan, Cipla, Larsen & Toubro and Reliance Industries were among the notable losers in the NIFTY50 index.

The overall market breadth was extremely positive as 2,796 shares ended higher while 1,391 closed lower on the BSE.