Sensex jumps 750 points, Nifty ends above 24,550; why did the Indian stock market rise today? EXPLAINED
The Sensex ended at 80,604.08, up 746 points, or 0.93 per cent, while the Nifty 50 settled at 24,585.05, rising 222 points, or 0.91 per cent.
The BSE Midcap and Smallcap indices ended 0.79 per cent and 0.35 per cent higher, respectively.
The overall market capitalisation of BSE-listed firms rose to nearly ₹ 444 lakh crore from ₹ 440 lakh crore in the previous session, making investors richer by about ₹ 4 lakh crore in a single session.
Here are five key factors that drove the Indian stock market higher today:
Experts believe short covering in an oversold market could be behind the rally in the market today.
Last week, the Sensex and the Nifty 50 extended losses for the sixth consecutive week, dragged by concerns over Trump's tariffs, weak earnings, and heavy foreign capital outflow.
Experts expected a relief rally in the market, as the medium—to long-term outlook remains positive.
The proposed meeting between US President Donald Trump and his Russian counterpart, Vladimir Putin, on Friday, August 15, has ignited hopes of a resolution to the Russia-Ukraine war.
Experts believe that a resolution to the Russia-Ukraine war could lead to the lifting of US sanctions on Russia and potentially pave the way for lower tariffs on India.
"Investors are positively assessing the upcoming US-Russia summit this week, which may possibly give way to a de-escalation in geopolitical tensions," Vinod Nair, the head of research at Geojit Investments Limited, observed.
While Trump's tariffs remain a key negative for the domestic market, experts believe the market is factoring in their limited impact on both the economy and overall market performance.
Some experts believe Trump's tariff on India is a pressure tactic, and eventually, tariffs will come down to 15-20 per cent.
"On an overall basis, we see limited impact on the equity market amid the India-US tariff across most sectors. We, in fact, see current tariff threats as negotiation tactics," said Pankaj Pandey, the head of research at ICICI Securities.
India's macroeconomic outlook remains healthy, keeping the medium to long-term outlook of the market healthy.
According to a Mint poll, India's retail inflation likely fell to a record low in July. The consumer price index (CPI)-based inflation is estimated to further fall to 1.4 per cent in July from 2.1 per cent in the previous month, according to the poll of 22 economists.
India's GDP growth is expected to remain above 6 per cent in FY26 despite Trump's tariff blow.
The RBI maintained its FY26 GDP growth forecast at 6.5 per cent despite Trump tariff uncertainty.
"As long as the US doesn't disrupt India's service exports, the Indian economy can handle even a 50 per cent tariff on Indian goods and continue to post above 6 per cent GDP growth. In our view, the impact of aggressive US tariffs would be felt badly by the specific sectors, which depend on exports to the US," said G. Chokkalingam, Founder and Head of Research, Equinomics Research Private Limited.
The Nifty 50 ended above 24,550, breaking the key resistance of 24,500. However, experts believe a decisive close above 24,600 will ensure the rally extends.
"Over the past six weeks, there have been multiple instances where the Nifty began the week on a strong note, only for the momentum to fade in the final sessions. This time, however, it appears that the markets have largely digested the recent tariff-related concerns and are now focusing more on earnings cues, with the results season nearing its end," said Ajit Mishra, SVP of research at Religare Broking.
"Oversold positions in heavyweights are providing support. Still, only a decisive close above the 24,600 mark could extend this recovery towards the 24,800–25,000 zone. Traders should maintain a hedged approach and focus on stocks consistently displaying relative strength for long positions," said Mishra.
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