Indian stock markets experienced a significant rise for the third consecutive day, with the S&P BSE Sensex gaining 595 points to close at 84,466.51 and the NSE Nifty 50 rising by 181 points to finish at 25,875.80. The bullish trend was powered largely by financial, IT, and automotive sectors. Key drivers of this market rally included favorable global market conditions, reduced inflation rates, and robust domestic macroeconomic indicators, which collectively uplifted investor sentiment.
Analysts noted that the markets were buoyed by optimism surrounding a potential trade deal with the United States and the prospects of an end to the prolonged government shutdown in Washington. Global markets showed a similar positive response, with stocks rallying, driven by improved risk appetite and an anticipated resolution to the government shutdown, coupled with hints at early changes to Federal Reserve interest rate policies due to signs of a cooling U.S. labor market.
The momentum from global equities positively influenced the Indian indices, as large-cap stocks led the charge, particularly in the automotive, IT, and pharmaceutical sectors. Easing inflation rates, characterized by lower consumer price index (CPI) and wholesale price index (WPI) figures, alongside a promising GDP growth outlook and positive earnings expectations for the second half of the fiscal year, contributed to the optimism surrounding the markets.
In the U.S., Wall Street also celebrated gains, with main index figures climbing higher due to the anticipated resolution of the government shutdown. Financial institutions played a pivotal role in this uptrend, particularly with companies like Goldman Sachs reporting strong performance. The tech sector also had a boost from Advanced Micro Devices (AMD), which proposed an optimistic outlook for future revenues from data center chips.
Moreover, European markets, exemplifying this global trend, reached record highs, led by banks, while Europe's STOXX-600 index continued to show impressive growth compared to its U.S. counterpart. The optimism in riskier assets was reflected strongly across both global and Indian markets.
On the technical front, analysts from LKP Securities indicated that the Nifty index remains on a strong upward trajectory, supported by a gap-up opening and moving above the essential 21-day exponential moving average (EMA). Potential resistance levels are anticipated around 26,000, with immediate support identified at 25,700.
Notable trading activity was observed with high turnover in stocks like Infosys, Reliance Industries, and Bharti Airtel. In volume trading, Vodafone Idea led the pack with a significant turnover. Stocks seeing selling pressure included Tata Steel and HDFC Bank, while Tata Motors and several other companies showed substantial investor interest.
Overall market sentiment remained bullish, as a majority of traded stocks exhibited positive movements, further solidifying the optimistic outlook for investors and market participants. With various economic indicators aligning favorably and signals of potential growth ahead, investor confidence continues to build in the Indian markets.