Nifty Closes Near 25,200, Sensex Gains Over 300 Points: What Led the Market to Rise After 4 Days of Losses?

The Indian stock market closed with gains bouncing back from the 4 day's fall on Tuesday, July 15, supported by hopes of a potential US-India trade deal. The index attempted to rebound from its three-week low touched on Monday, July 14.

The Sensex rose by 317.45 points, or 0.39%, to close at 82,570.91, while the Nifty 50 went up by 113.50 points, or 0.45%, to settle at 25,195.80. The rally was supported by broad-based buying across all sectors, especially in auto and pharma stocks.

Top Gainers And Losers:

Top Nifty gainers were Hero Motocorp, Bajaj Auto, Sun pharma, Shriram Finance, Apollo Hospitals and Bajaj Finserv among others with Hero Moto Corp up by 4.95%.

While, HCL Tech, SBI Life, Eternal, HDFC Life, Kotak Bank, and Tata Steel were the top losers of the day with HCL Tech falling by 3.26%.

All sectoral indices closed in the green, with pharma, auto, PSU banks, consumer durables, and real estate gaining between 0.5% and 1%. The Nifty Auto and Nifty Pharma indices were the top performers, each rising over 1%.

Other sectors like Nifty Bank, PSU Bank, Metal, Media, and Realty also extended their gains for the second day in a row. Nifty Financial Services, Oil & Gas, and IT broke their recent losing streaks.

Midcap and smallcap stocks also performed well, with BSE Midcap and Smallcap indices rising nearly 1% each for the second straight session.

Market sentiment remained positive, with 2,475 stocks advancing, 1,422 declining, and 148 unchanged on the BSE.

What Caused the Market to Rise Today?

Indian stock market ended on a positive note today supported by hopes of a potential US-India trade deal. Commerce and Industry Minister Piyush Goyal said on Monday that negotiations with the US are expected to result in a "win-win" trade-complementing agreement, according to tradingeconomics.com.

Meanwhile, June inflation data also lifted sentiment, as inflation eased to its lowest level since 2019, boosting expectations for further interest rate cuts. However, traders remained cautious ahead of the US inflation data, which could influence the Fed's interest rate policy.

"Market sentiment is showing signs of improvement, supported by a blend of global and domestic developments. Optimism is growing around the possibility of an interim trade agreement with the US, which could lead to a moderation in tariff-related risks.

Concurrently, domestic inflation has fallen to multi-year lows, strengthening expectations of a further rate cut by the RBI-potentially accelerating future economic growth, which is currently showing signs of improvement," said Vinod Nair, Head of Research, Geojit Investments.

Technical Outlook for Nifty:

"The Nifty recovered during the day as the index found support around 25,000 in the previous trading session. On the higher end, however, it faced initial resistance at the 21-EMA, which is placed around 25,250. A decisive move above 25,260 in the coming sessions could lead to a rally towards 25,400 and beyond. On the other hand, a failure to sustain above 25,260 might weaken the bulls' grip on the market. In that case, the Nifty may decline towards the support zone of 25,000 and 24,920-24,900," said Rupak De, Senior Technical Analyst at LKP Securities.

Rupee VS Dollar:

The Indian rupee appreciated 18 paise against the US dollar at 85.81 on Tuesday, compared to 85.99 on Monday.

"The Indian Rupee has regained ground against the US Dollar, reversing a recent two-day decline. This appreciation largely reflects renewed investor confidence in domestic equity markets and a softening of the US Dollar Index.

Market participants are keenly awaiting the release of pivotal US inflation data later today, as it's expected to heavily influence future monetary policy decisions and deliberations over Federal Reserve leadership, especially amidst prevailing trade uncertainties.The USDINR spot pair is projected to encounter resistance at 86.30 and find support at 85.55," said Dilip Parmar, Senior Research Analyst, HDFC Securities.

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