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Today's In-Depth Report
Nifty Ends Marginally Higher as Auto Stocks Rally; Caution Ahead of Inflation Data
Market summary
Markets opened flat and tested critical support around the 24,750 level before recovering most of the day’s losses. The rally was largely driven by the auto complex after a government decision to lower GST on select auto items from 28% to 18%. However, profit booking in the final hour erased a chunk of the gains and resulted in a small-bodied bearish daily candle with a long upper shadow — a classic sign of short-term profit-taking.
Top movers
Auto majors were the day’s big winners — Tata Motors, Mahindra & Mahindra (M&M) and Bajaj Auto outperformed, while ancillary names such as Bharat Forge, Motherson Sumi and Exide also climbed on optimism around India–Europe FTA talks and the GST cut.
- Auto index: surged more than 3% to hit a 52-week high of 27,189.
- M&M, Eicher, TVS, Maruti: rose ~2–4% and hit record highs.
- IT stocks: underperformed; profit-taking trimmed early gains in metals, real estate, FMCG and pharma.
What drove the market
Positive catalysts:
- GST reduction on autos from 28% to 18% and company plans to pass benefits to customers from September 22.
- Sector rotation into mid- and small-cap stocks as investors hunted for value beyond large caps.
- Broadly positive cues from most Asian and European markets.
Headwinds:
- Late-session profit booking that erased much of the intraday rally.
- Ongoing FII selling pressure.
- Concerns about reports of a potential 50% US tariff on certain Indian goods.
- Markets cautious ahead of key inflation data from India and the US this week.
Technical outlook
The Nifty opened flat, briefly tested support near 24,750, then rallied toward 24,900 before surrendering gains late in the session. The daily candle is a small-bodied bearish formation with an extended upper wick — indicative of profit-taking at minor bounces.
Key levels to watch:
- Immediate support: 24,750 — must hold for bulls to regain control.
- Secondary supports: 24,700 and 24,600.
- Upside targets on a decisive hold above support: 25,000, then 25,150.
Short-term traders should be alert for volatility around data releases this week. A sustained move below 24,750 could invite deeper profit-taking, while a strong hold there and fresh domestic inflows could push the index toward the 25,000–25,150 zone.
Near-term outlook & strategy
Sentiment is mixed-to-cautious. For traders: keep protective stops in place and avoid adding large directional bets ahead of inflation numbers. For investors: the GST-led improvement in the auto space is a structural positive, but consider staging purchases rather than committing full sizes immediately — watch for confirmation of momentum after the inflation data.
Watchlist for the week: India and US inflation prints, progress on India–Europe FTA discussions, flows from FIIs, and corporate updates around passing GST benefits to customers (from Sept 22).