Broader indices outperform; 66 smallcap stocks rally 10–33%

This week, the BSE Sensex index rose 709.19 points or 0.87 percent to end at 81,306.8,5, and Nifty50 gained 238.8 points or 0.96 percent to finish at 24,870.10.

The broader indices outperformed and extended the gains in the second consecutive week ended August 22, with BSE Small and Mid-cap indices jumping 2 percent each and BSE Large-cap index added a percent.

This week, the BSE Sensex index rose 709.19 points or 0.87 percent to end at 81,306.8,5, and Nifty50 gained 238.8 points or 0.96 percent to finish at 24,870.10.

The pace of Foreign Institutional Investors (FIIs) selling declined this week, but they remained net sellers in the 8th week, as they offloaded equities worth Rs 1,559.51 crore. On the other hand, Domestic Institutional Investors (DII) extended their buying in the 18th consecutive week, as they purchased equities worth Rs 10,388.23 crore.

In August so far, FII sold equities worth Rs 25,751.02 crore and DII bought equities worth Rs 66,183.51 crore.

On the sectoral front, the BSE Auto index rose 5 percent each, the BSE Consumer Discretionary, Telecom, and realty indices rose more than 3 percent each, while the BSE PSU and Power indices were down 0.5 percent each.

"The domestic market started the week with a gap-up, driven by optimism surrounding GST rationalization. Additionally, a sovereign rating upgrade by S&P added another layer of confidence among investors. However, the rally lost momentum toward the end of the week as investors turned cautious due to profit booking and external headwinds. A spike in the 10-year Indian government bond yield also raised concerns about the fiscal position in light of the GST reforms," said Vinod Nair, Head of Research, Geojit Investments.

"The market is awaiting clarity on whether the additional 25% U.S. tariffs on Indian goods, linked to the import of Russian oil, will be implemented next week. Simultaneously, investors will closely watch the outcome of the U.S. Fed Chair’s speech at the Jackson Hole symposium for cues on the interest rate trajectory. Despite these external headwinds, domestic economic indicators offer a glimmer of hope."

"A record-high composite PMI and early signs of an urban demand revival are expected to support the market. The consumption sector is likely to benefit from a favourable monsoon, low interest rates, and indirect tax reliefs."

"The week ahead will be crucial, with key releases including India’s GDP, along with U.S. growth and inflation data—both of which will be closely tracked for insights into the global economic outlook," he added.

The BSE Small-cap index rose more than 2 percent, led by Foseco India, KIOCL, KR Rail Enginerring, Apollo Micro Systems, HLE Glascoat, Jai Corp, Pennar Industries, Rishabh Instruments, while losers were Nazara Technologies, Agarwal Industrial Corporation, Thyrocare Technologies, Ethos, Master Trust, Share India Securities, GVK Power & Infrastructure, Suratwala Business Group, Shilpa Medicare, Uflex, Valiant Organics.

After a steady run-up, Nifty paused on Friday, suggesting a brief consolidation before the next leg higher. The index continues to hold above the 50 EMA, reinforcing the short-term uptrend.

On the downside, support lies at 24,800; staying above this level keeps the trend intact with scope for an advance towards 25,000–25,250.

After showing consolidation-type movement near the resistance of 25200 levels on Thursday, Nifty slipped into a sharp profit booking on Friday and closed the day lower by 213 points. The immediate hurdle of down down-sloping trend line weighed heavily on the market and resulted in sharp weakness.

The short-term trend of Nifty is weak, and we expect Nifty to find support around the previous opening upside gap of 18th Aug, around 24800-24700 levels by next week. On the other side, a sustainable upside above 25150 could bring bulls back into the scene.

Despite news of a GST rate cut, FIIs maintain approximately 90% short positions in index futures. Additionally, market sentiment is cautious due to the looming threat of a 25% tariff on India, with a deadline set for August 27, 2025. Globally, uncertainty persists due to mixed U.S. economic data and ambiguity surrounding the U.S. Federal Reserve's interest rate decisions.

Investors are closely monitoring today’s U.S. jobs report and the Federal Reserve Chairman’s speech at the Jackson Hole symposium for further clarity. From a technical perspective, the Nifty faces strong resistance in the 25,100–25,225 range.

The 24,850–24,700 zone is a critical support level that must hold to sustain bullish momentum. A breach below this could see the index slide toward its 200-day moving average (DMA) at 24,050, signaling potential bearish pressure.