Sensex up 600 pts, Nifty near 25,900: Likely NDA win in Bihar polls among key factors behind market rise

Sensex up 550 pts, Nifty above 25,850: Likely NDA win in Bihar polls among key factors behind market rise

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26 Aug, 2025 12:21

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The equity benchmark indices rallied on Wednesday, with the Sensex climbing over 550 points and the Nifty crossing the 25,850 mark, driven by broad-based buying amid firm global cues and upbeat investor sentiment following exit polls in Bihar projecting a likely victory for the ruling alliance.

At around 11:15 a.m, the Sensex advanced 635.09 points or 0.76 percent to 84,506.41, while the broader Nifty gained to 25,881.65, up 186.70 points or 0.73 percent. Market breadth was also positive as about 2,216 shares advanced, 1,099 shares declined and 172 shares remained unchanged.

Adani Enterprises, Adani Ports and Special Economic Zone and ETERNAL were among the top gainers in the Nifty50 pack, rising up to 6 percent, while Shriram Finance and JSW Steel were the major laggards, declining up to 1 percent.

Key factors driving the rally

1) India-US trade deal hopes: Investor sentiment was buoyed after US President Donald Trump said the United States was close to finalising a trade agreement with India. "We’re getting close," Trump told reporters at the White House, expressing confidence that the agreement would mark a significant improvement over past arrangements.

2) Bihar exit polls: Markets also took cues from exit polls predicting a comfortable win for the ruling National Democratic Alliance (NDA) in Bihar. Analysts said the projections reinforced expectations of political stability, which is seen as positive for the market.

"Sentiments have turned for the better with news of an India-US trade deal getting finalised soon and the exit polls indicating a decisive victory for the NDA in Bihar. This will strengthen the bulls but is not good enough for the markets to stage a decisive breakout and sustained rally," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

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3) End to US government shutdown: Global sentiment improved after the US Senate approved a bipartisan compromise to end the longest government shutdown in American history, which had disrupted several federal services and delayed benefits. The agreement helped ease investor concerns and lifted risk appetite globally.

"Bulls are in charge, buoyed by exit polls in Bihar predicting an NDA landslide, optimism over a US-India trade deal, and hopes of an end to the US government shutdown," Prashanth Tapse, Senior Vice President (Research) at Mehta Equities told Reuters.

4) Positive global cues: Asian markets traded mixed, with South Korea’s Kospi and Hong Kong’s Hang Seng moving higher, while Japan’s Nikkei 225 and China’s Shanghai Composite Index edged lower. US stocks closed largely higher in overnight trade on Tuesday, providing further support to domestic equities.

5) Crude oil declines: Brent crude, the global oil benchmark, slipped 0.23 percent to USD 65.01 per barrel. The decline in crude prices is generally positive for India.

6) Buying in IT shares: Strong buying was seen in IT shares as sentiments improved on plans to end US government shutdown. The Nifty IT was up nearly 2 percent, with all its 10 constituents in the green.

7) India Vix declines: The fear gauge or the volatility index declined to 11.82, down 5.32 percent, showing reduced uncertainity among the investors.

Technical view

Anand James, Chief Market Strategist at Geojit Financial Services, said, "Despite a few uncertain moments early in the session, the strong rebound and close above 25,650 have kept Nifty on track for the 25,850–25,980 targets outlined earlier. However, some resistance is expected near 25,726. Failure to hold above that level or a fall below 25,630 could limit the upside. Key support levels are placed at 25,200 and 25,088."

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.