On Tuesday, August 20, the Indian stock market experienced a notable boost, with the Sensex and Nifty 50 both closing significantly higher. The Sensex gained 378 points, or 0.47%, ending at 80,802.86. Similarly, the Nifty 50 rose by 126 points, or 0.51%, closing at 24,698.85. This upward trend was supported by positive global cues and market sentiment.
Asian and European markets also saw gains, driven by expectations that US Federal Reserve Chair Jerome Powell will offer clarity on potential interest rate cuts during the Jackson Hole Symposium later this week.
Market participants are anticipating either a 25 basis points or a 50 basis points rate cut in September, which has contributed to the optimistic outlook.
The BSE Midcap index increased by 1%, while the Smallcap index mirrored the benchmark's rise, also up by 0.5%. The overall market capitalization of BSE-listed companies surged to approximately ₹456.7 lakh crore, up from nearly ₹454.4 lakh crore in the previous session. This jump in market cap has resulted in investors gaining over ₹2 lakh crore in a single day.
Several stocks reached fresh 52-week highs during intraday trade, including TCS, Tech Mahindra, Sun Pharma, Ashok Leyland, HDFC Asset Management Company, ICICI Lombard General Insurance Company, Persistent Systems, Shriram Finance, and Trent. This broad-based rally highlights strong investor confidence.
Vinod Nair, Head of Research at Geojit Financial Services, noted that the domestic market's strong start was fueled by positive global sentiment, including ongoing Israel-Hamas ceasefire talks and diminishing US recession fears.
The drop in crude oil prices, driven by easing geopolitical risks and weak demand from China, has further benefited the domestic economy. However, inflationary pressures in Japan and an appreciating Yen are factors to watch, with upcoming Japan inflation data and FOMC minutes expected to provide further insights into future interest rate trends.
In the Nifty 50 index, 38 stocks ended in the green. SBI Life, HDFC Life, and Bajaj Finserv were among the top gainers, while Bharti Airtel, ONGC, and Apollo Hospitals were the main losers.
The Nifty Bank index saw a rise of 0.86%, and the Nifty Financial Services index increased by 1.11%. The Nifty PSU Bank and Private Bank indices recorded gains of 1.68% and 1.02%, respectively.
Rupak De, Senior Technical Analyst at LKP Securities, observed that the Nifty's movement above 24,700 and its sustained position above 24,600-24,650 suggest a strong trend. However, a drop below 24,600 could signal a reversal. On the upside, the Nifty might aim for levels around 24,840-24,860.
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