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Indian Market Rises on Sovereign Upgrade and GST Hope

By Mandar in Indian Market Insights —

Indian Stock Market Overview - August 19

The Indian stock market demonstrated strength on August 19, building on the positive trend from the previous day. Here's a breakdown of the key highlights:

  • The Sensex experienced a substantial increase of 676 points, closing at 81,273.
  • The Nifty also saw significant gains, rising by 251 points to reach 24,882.
  • This marks three consecutive days of gains.

The market's positive performance was driven by several factors.

  • Optimism surrounding India's sovereign rating upgrade by S&P.
  • Anticipation of GST rate rationalization, expected by October.

Sector Performance

Several key sectors showed strong performance, indicating broad-based market participation.

  • Automobiles and consumer durables led the gains, with the Auto index surging 4% and consumer durables rising 3%.
  • Realty, metal, FMCG, telecom, and private banks also saw healthy gains, ranging from 1% to 2%.

Specific stocks that contributed to the Nifty's gains:

  • Major gainers included Maruti Suzuki, Nestle, Hero MotoCorp, Bajaj Finance, and Bajaj Auto.
  • Some stocks lagged, including ITC, Tech Mahindra, L&T, and NTPC.

Technical Analysis and Outlook

A technical perspective reveals a robust market:

  • The Nifty is trading above crucial moving averages, supported by bullish momentum indicators.
  • The index successfully defended the gap between 24,670 and 24,850.
  • Potential for further upside towards 25,000 and possibly 25,250, which is critical to break the recent lower highs-lower lows pattern.

Support and potential downside levels:

  • Support levels are around 24,700-24,600.
  • The August low of 24,337 acts as a near-term floor.

Foreign Institutional Investors (FII) Activity

Foreign investors showed renewed interest:

  • Foreign institutional investors bought Indian equities worth approximately ?551 crore.
  • This shift follows a period of net selling over four sessions.

Market Sentiment and Key Catalysts

The overall market sentiment is positive, supported by:

  • Easing oil prices due to international dialogues.
  • Softer U.S. inflation data, increasing expectations of a Federal Reserve rate cut.

Key factors to watch:

  • Developments related to GST reforms.
  • Updates on sovereign ratings.

The market's momentum remains positive, suggesting cautious optimism and the potential for further gains in the short term.