Sensex rises nearly 400 pts, Nifty above 24,950: RIL, auto stocks rally among key factors behind market rise

Sensex, Nifty extend rally in August 19 trading session. 

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The equity benchmark indices rose for the fourth straight session on Tuesday, supported by gains in auto shares and index heavyweight Reliance Industries amid positive global cues.

Sensex edged higher by 370.64 points or 0.46 percent to settle at 81,644.39. During the day, it jumped 482.13 points or 0.59 percent to 81,755.88. The Nifty climbed 103.70 points or 0.42 per cent to 24,980.65.

Tata Motors, Reliance Industries, Adani Ports and Special Economic Zone, Bajaj Auto and ETERNAL were among the major gainers, rising up to 4 percent.

Key factors driving the market:

1) Auto stocks extend rally: Auto shares rose up to 6 percent, with Ola Electric, Bajaj Auto, Hero MotoCorp, Hyundai Motor, Eicher Motors and Maruti Suzuki leading the gains. The Nifty Auto index advanced 1 percent, adding to Monday’s nearly 5 percent jump on reports of a possible GST cut on vehicles to boost demand. Sentiment also improved after reports that China assured India of addressing concerns over supply of rare earth magnets, a key input for automakers.

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2) Reliance Industries surge: Shares of Reliance Industries gained more than 2 percent after its Jio unit announced changes in prepaid tariffs. Bullish brokerage calls also aided in the positive momentum for the heavyweight stock.

Reliance shares rise over 2% on Jio tariff changes, positive brokerage calls

3) Positive Global cues: Key Asian markets traded in the green, with Shanghai’s SSE Composite Index and Hong Kong’s Hang Seng posting gains.

4) Geopolitical relief: Prospects of talks between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky raised hopes of easing tensions. Prime Minister Narendra Modi reiterated India’s call for a peaceful resolution during a phone conversation with Putin on Monday. Market experts said signs of progress on the peace front may improve India’s trade outlook.

"The White House talks indicate that there is "reasonable chance of ending the war". And, if this happens, the secondary tariff on India for buying oil from Russia would become irrelevant. This may turn out to be positive from the market perspective," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

5) Crude prices ease: Brent crude futures fell 0.50 percent to USD 66.24 a barrel, a positive for India as it reduces import costs.

6) FII activity: Foreign institutional investors turned buyers on Monday, purchasing equities worth Rs 550.85 crore.

7) Jackson Hole watch: Investors await for rate cues from the US Federal Reserve’s annual Jackson Hole symposium scheduled for August 21-23. "Markets are consolidating after Monday’s rally and may stay cautious until Powell’s speech," Devarsh Vakil, head of prime research at HDFC Securities told Reuters. He added that expectations of a September rate cut remain, though tariff concerns weigh on sentiment.

8) Rupee strengthens: The rupee appreciated 19 paise to 87.20 against the US dollar in early trade, tracking firm domestic equities and optimism around proposed reforms. Traders said suspected RBI intervention and easing geopolitical risks also supported the currency.

Technical view

"The 50-day SMA near 25,013 is acting as resistance for Nifty. Upside momentum could continue as long as the index holds above 24,850, though a slip below may not lead to a sharp fall. Resistance levels are seen at 25,013-25,096-25,156," said Anand James, Chief Market Strategist, Geojit Financial Services.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.