The Indian stock market continued its upward momentum for the fifth consecutive session on Wednesday, August 21, driven by strong performances from FMCG and IT heavyweights like ITC, Hindustan Unilever (HUL), and Tata Consultancy Services (TCS). The Nifty 50 index closed 0.29% higher, marking a significant rise of approximately 2.6% over the last five sessions.

Market Performance Overview

The Nifty 50 opened the session slightly lower at 24,680.55, down by 18 points from its previous close of 24,698.85. Despite the initial dip, the index rebounded to touch an intraday high of 24,787.95 before finally closing at 24,770.20, up by 71 points or 0.29%. The session's gains were largely supported by positive global cues, particularly in anticipation of the Jackson Hole Economic Symposium, where US Fed Chair Jerome Powell is expected to provide guidance on the trajectory of upcoming rate cuts.

Similarly, the Sensex also experienced gains, closing 0.13% higher at 80,905.30 after opening 136 points lower at 80,667.25. The index saw an intraday high of 80,952.83, reflecting investor optimism amid global market anticipation.

Key Contributors to the Rally

The rally in the Nifty 50 was primarily driven by FMCG and IT stocks. ITC, Bharti Airtel, Hindustan Unilever, Titan, and TCS emerged as the top contributors, helping the index close in the green. On the contrary, stocks like HDFC Bank, ICICI Bank, Tata Steel, UltraTech Cement, and Power Grid were the top drags, showing declines in their share prices.

The BSE Midcap and Smallcap indices outperformed the Sensex, registering gains of 0.43% and 0.87%, respectively. The overall market capitalization of firms listed on the BSE surged by approximately ₹2.4 lakh crore, bringing it to nearly ₹459.3 lakh crore, indicating robust investor confidence.

Sectoral Performance

Among the key sectors on the NSE, the Nifty Realty index fell by 1.31%, while the Nifty Bank and Financial Services indices saw marginal declines of 0.23% and 0.15%, respectively. The PSU Bank index also dropped by 0.43%. Conversely, sectors like Nifty Consumer Durables (up 1.41%), FMCG (up 1.37%), Media (up 1.20%), and Pharma (up 0.91%) closed with healthy gains, indicating a shift in portfolio allocation towards defensive sectors.

Global Market Influence and Technical Analysis

The domestic market's performance was influenced by global cues ahead of the Jackson Hole Economic Symposium, scheduled from August 22 to 24. Jerome Powell's speech at the conference is eagerly awaited as it could provide clear hints about the Federal Reserve's approach to rate cuts, which are widely anticipated to begin in September. The expectation of rate cuts has been fueled by recent declines in US inflation and a moderation in overall economic growth, leading to a cautiously optimistic tone in global markets.

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Vinod Nair, Head of Research at Geojit Financial Services, highlighted that the Indian market traded within a tight range with a positive bias, supported by strong DII flows. He noted that the shift towards FMCG, consumer, commodities, and pharma sectors was indicative of a defensive portfolio strategy amid cautious global market sentiments.

On the technical front, the market structure remains positive. Shrikant Chouhan, Head of Equity Research at Kotak Securities, emphasized that the Indian stock market is maintaining an uptrend continuation formation on both daily and intraday charts. He noted that as long as the Nifty 50 remains above 24,650, the bullish momentum is likely to continue, potentially driving the index to the 24,850-24,900 range. However, a drop below 24,650 could trigger a quick intraday correction towards the 20-day SMA, which is positioned around 24,525-24,500.

Conclusion

The sustained gains in the Indian stock market, particularly in the Nifty 50, underscore the positive sentiment driven by strong performances in FMCG and IT stocks. As global markets remain cautiously optimistic ahead of the Jackson Hole Symposium, the Indian market's outlook appears robust, with technical indicators suggesting continued bullish momentum. Investors are advised to stay vigilant, especially in light of potential global economic shifts and the forthcoming Fed rate cuts.

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