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Sensex jumps 1,168 pts, Nifty tops 25k: Here's why markets are rising today
The BSE Sensex rallied 1,168 points in the intraday to hit a high of 81,765.77. The NSE Nifty50 reclaimed the 25,000 mark in the intraday to hit a high of 25,022, up 391 points from the previous day's close of 24,631.
Last checked, the BSE Sensex was trading at 81,741.88 levels, up 1,144.22 points or 1.42 per cent, while the NSE Nifty50 index was up 381.40 points or 1.55 per cent at 25,012.70 levels.
Twenty-five of the 30 Sensex constituents were trading in green, including Maruti Suzuki, Bajaj Finance, Ultratech Cement, Mahindra and Mahindra, Trent, and Hindustan Unilever, gaining in the range of 3 to 7.5 per cent.
In the broader market, the NSE MidCap 100 index was up 1.43 per cent, and the Nifty SmallCap 100 index rose 1.2 per cent.
All the sectoral indices were in green. The Nifty Auto index surged by 4.35 per cent, and the Nifty Consumer Durables index by 3.22 per cent. Nifty Bank, Financial Services, FMCG, Metal, and Realty also surged up to 3 per cent.
Here are the key reasons behind the Sensex, Nifty rally on August 18:
GST reforms: During his Independence Day speech at the Red Fort on Friday, PM Modi announced next-generation GST reforms aimed at reducing the tax burden across the country. On Sunday, he urged the state government to cooperate in implementing the proposed goods and services tax (GST) reforms, reported PTI.
VK Vijayakumar, chief investment strategist at Geojit Investments, said the declaration by the prime minister on the next major reforms in GST by Diwali 2025 is a big positive. "The expectation is that most of the goods and services will be in the 5 per cent and 18 per cent tax slabs. Sectors like autos and cement, which are presently in the 28 per cent tax slabs, are expected to benefit. TVS Motors, Hero, Eicher, M&M and Maruti are likely to respond positively to the news. Insurance companies are also expected to benefit from the GST revision," Vijayakumar said.
S&G Global rating upgrade: On Thursday, S&P Global Ratings upgraded India's long-term sovereign credit rating to 'BBB' from 'BBB-', the first upgrade in 18 years. The global ratings agency cited economic growth, improved monetary policy credibility, and sustained fiscal consolidation for the upgrade. S&P said it expects the impact of US tariffs on the Indian economy to be manageable due to its limited reliance on trade and the dominance of domestic demand in its economy.
"The landmark ratings upgrade after 18 years signals enhanced investor confidence and could trigger sustained foreign inflows into Indian markets," said Devarsh Vakil, head of prime research at HDFC Securities.
Trump Putin talks: The highly anticipated meeting between US President Donald Trump and his Russian counterpart, Vladimir Putin, in Alaska concluded with no formal agreement. However, both leaders agreed to hold another round of talks, offering a hopeful sign toward resolving the Russia-Ukraine conflict.
Technical view
From a technical perspective, Anand James, chief market strategist at Geojit Financial Services, said that a broad market reversal is already underway.
"Last week's reversal attempts stalled in the 24,670-720 region, depriving Nifty of a bullish confirmation. However, 43 per cent and 39 per cent of mid and small cap index constituents respectively ended up above their respective 10-day SMAs, the highest since late July, suggesting that a broad market reversal is already in play," James said.
"This encourages us to persist with the 24,850-25,000-25,200 objectives discussed last week. Expect 24,850 to pose a stiff challenge, but upside hopes may be persisted with, as long as the volatility thereof is contained above 24,650," he added.
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