Nifty reclaims 25,000, Sensex starts strong as Jackson Hole Symposium commentary fuels enthusiasm; IT shares rally

Bharat Electronics and Trent were buzzing in trade today after they were included in the benchmark Nifty 50 index.

Benchmark indices Nifty and Sensex were off to a positive start on August 26 after US Fed Jerome Powell's indication of a rate cut next month was cheered by investors. At the Jackson Hole Symposium, Wyoming, Powell hinted, "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

At about 10:45 am, the Sensex was up 635.46 points or 0.78 percent at 81,721.67, and the Nifty was up 187.40 points or 0.75 percent at 25,010.60. About 1978 shares advanced, 1365 shares declined, and 135 shares unchanged.

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"Powell's speech hinted at a potential rate cut in September and this has reignited investor optimism, with markets eyeing either a 25 or 50 basis point reduction. The Fed's decision will, however, hinge on upcoming inflation and employment reports. Meanwhile," Prashanth Tapse, Senior Vice President of Mehta Equities, said. He also added that foreign institutional investors (FIIs) and domestic institutional investors will likely turn into net buyers will also be a positive for the market.

Reflecting the overall bullish sentiment, the broader market advanced as the mid-small-cap indices surged by 0.3 and 0.5 percent, respectively, outpacing the benchmark indices. Both indices have also comfortably exceeded the Nifty's year-to-date gain of 14 percent. However, analysts caution that large-cap stocks may offer better money-making opportunities, as many stocks in the broader market are trading at multiples that far outstrip their growth rates.

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Bharat Electronics and Trent were buzzing in trade today after they were included in the benchmark Nifty 50 index. The Index Maintenance Sub-Committee (Equity) of NSE Indices has decided to make changes in various Nifty equity indices as a part of the semi-annual review of broad market indices. Trent, with an average free-float market capitalization of Rs 99,364 crore, and Bharat Electronics (BEL), with an average free-float market capitalization of Rs 89,317 crore, have been added to the Nifty 50 index. These changes will take effect from September 30.

Read more: Bharat Electronics, Trent stocks enter Nifty 50; Index adjustment effective Sept 30

Among sectors, Nifty IT was the brightest spark and edged over a percent given its sensitivity to interest rate cuts in the US. Gains in TCS, Infosys, and Tech Mahindra kept the positive sentiment intact. Nifty Metal and Bank followed, gaining nearly half a percent, each. Among laggards, Nifty Pharma and Realty slipped 0.5 percent each.

"Nifty can find support at 24,750 followed by 24,700 and 24,650. On the higher side, 24,900 can be an immediate resistance, followed by 25,000 and 25,050," says Deven Mehata, Derivative Analyst at Choice Broking. "The charts of Bank Nifty indicate that it may get support at 50,700, followed by 50,500 and 50,300. If the index advances further, 51,100 would be the initial key resistance, followed by 51,300 and 51,500," he added.

He also said that the Indian markets are forming higher high and higher low formations indicating strength in the markets. Nifty can attempt towards 25,000 levels in the last week of the month with a monthly expiry this week. Global markets are also performing well which will give support for Nifty.

ONGC, Tech Mahindra, Wipro, TCS, and Hindalco were the top gainers on the Nifty, while Apollo Hospitals, HDFC Life, Grasim, BPCL, and Dr Reddy's were the top laggards.

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