Closing Bell: Market ends 1% higher as manufacturing data stands at 8-month high; auto, energy stocks shine

The Indian market closed on a strong note, aided by manufacturing data which came out at eight-months high on Monday, and positive global cues. Extending rally for the fourth session, benchmarks Nifty50 and Sensex closed with around one per cent gain each on Monday. The broader Nifty50 ended above 17,300, while the Sensex rose around 500 points to settle near 58,100.  

"The uptrend continues in the market as the bulls' invasion of the 17000-17500 zone continues. The trend is likely to remain positive as long as the benchmark index sustains above 200 DMA, placed at 17025," said Rupak De, Senior Technical Analyst at LKP Securities. 

Over the near term 17000 is likely to act as crucial support, while on the higher end, 17500 may act as crucial resistance, said the expert. "Again, above 17500, the Nifty may move up towards 18000," he added.

In the broader market, Nifty midcap rose by 1.6 points and smallcap surged 1.7% as India VIX (Volatility Index) closed above17-mark.  

Amid expected positive auto sales number for July 2022, Nifty Auto lead the sectoral indices with more than three per cent gain. Pharma stocks witnessed some profit booking, while others comfortably sat in the green zone.  

Tata Motors, Adani Ports, Mahindra & Mahindra, Bharti Airtel, ONGC, Powergrid, NTPC, Reliance Industries, Maruti Suzuki, Kotak Bank were among top gainers on Monday.  

Sun Pharma, Hindustan Unilever, HDFC LIfe, Britannia, Divis Laboratories, TCS and IndusInd Bank were among top losers on the benchmarks amid positive market.  

As per Vinod Nair, Head of Research at Geojit Financial Services, FPIs turning net buyers is the major factor driving the uptick in the domestic market.

"Record low unemployment rate in the Eurozone and fall in crude oil prices, increased optimism globally. Oil prices took a hit as the deteriorating demand outlook outweighed cues of ongoing supply tightness. Auto stocks were in focus post the release of positive auto sales numbers," Nair said.

Earlier, India's factory activity expanded at its quickest pace in eight months in July, driven by solid growth in new orders and output as demand continued to improve on the back of easing price pressures, said Reuters citing a private survey.

The survey results suggested the Indian economy has remained resilient, at least for now, despite concerns over faster interest rate hikes, massive capital outflows, a weakening rupee and a rapidly slowing global economy.