Sensex closes 150 pts higher after CAS; Nifty ends above 24,600

Indian equity benchmarks closed higher on Wednesday, with the Sensex gaining about 150 points and the Nifty settling above the 24,600 mark. The uptick followed the government's announcement of the CAS, which lifted investor sentiment across the board.

The BSE Sensex ended at 80,456, up 149.87 points or 0.19 percent. The NSE Nifty closed at 24,612.40, gaining 43.35 points or 0.18 percent. The session saw buying interest in select heavyweights, though gains were capped by profit booking in some pockets.

CAS announcement boosts sentiment

The market rally was attributed to the government's decision on the CAS, a policy move that traders said came as a positive surprise. The announcement, made during market hours, triggered a sharp uptick in banking and financial stocks, which led the advance.

Market participants said the CAS was widely expected, but the finer details were seen as favorable for corporate earnings. This prompted institutional buying in index heavyweights, pushing the Nifty past the psychologically important 24,600 level in the final hour of trade.

Sectoral performance: Banks lead, IT lags

Among sectoral indices, banking and financial services were the top gainers, with the Nifty Bank index closing 0.6 percent higher. Private lenders and PSU banks both saw buying, while financial services firms also advanced.

On the other hand, IT stocks remained under pressure, with the Nifty IT index slipping 0.3 percent as investors booked profits after a recent run-up. Pharma and FMCG indices also ended marginally lower, while auto and metal stocks were mixed.

Broader market and market breadth

The broader market showed resilience, with the BSE Midcap index rising 0.3 percent and the Smallcap index up 0.2 percent. Market breadth was positive, with about 1,850 stocks advancing against 1,620 declining on the BSE.

Among individual stocks, Reliance Industries, HDFC Bank, and ICICI Bank were the top contributors to the Sensex gains. However, Infosys, TCS, and HUL were the major drags, capping the upside.

Foreign institutional investors remained net buyers in the cash market, while domestic institutional investors were also active, traders said. The rupee traded flat against the US dollar at 83.50.

What to watch next

Investors now await the release of the minutes from the central bank's policy meet, due later this week, for cues on interest rates. The global cues, especially the US Federal Reserve's stance, will also be closely monitored.

Market participants will also track the progress of the monsoon and its impact on inflation, which could influence the central bank's next move. The near-term trend is likely to remain stock-specific, with earnings and policy announcements driving individual movers.