Sensex Gain 676 Points, Nifty at 24,876; Nifty Prediction for Tomorrow

Markets End with Strong Gains: Will Momentum Sustain on August 19?

The Indian equity markets started the week on a high note, surging sharply on Monday, August 18, amid strong global cues and renewed optimism following the announcement of proposed reforms in the Goods and Services Tax (GST) structure.

The rally was broad-based and driven by a combination of policy optimism, positive technical indicators, and fresh buying across key sectors. However, some intraday volatility and resistance at higher levels suggest a cautious yet positive outlook for the upcoming session on August 19.

Market Snapshot: Indices Soar

The benchmark indices closed with healthy gains, recouping much of the ground lost during the past few weeks:

• BSE Sensex gained 676.09 points or 0.84% to settle at 81,273.75
• Nifty 50 rose by 251.20 points or 1.02%, ending at 24,882.50

Market breadth remained strongly positive:

• 2,446 stocks advanced,
• 1,555 declined, and
• 160 remained unchanged

This uptrend marked a potential turnaround after six weeks of correction, raising hopes of a near-term rally.

Top Gainers and Losers: Auto Stocks Take the Lead

Among the Nifty 50 constituents, auto stocks dominated the gainers’ list, propelled by hopes of a consumption-led demand revival.

Top Nifty Gainers:

• Maruti Suzuki
• Nestle India
• Hero MotoCorp
• Bajaj Finance
• Bajaj Auto

Top Nifty Losers:

• ITC
• Tech Mahindra
• Larsen & Toubro (L&T)
• NTPC
• Eternal

Sectoral Performance: Broad-Based Buying Except IT, Power, and Media

The bullish sentiment extended across most sectors, with key thematic and sectoral indices ending in the green:

• Nifty Auto Index: Up 4%, supported by buying in two-wheeler and passenger vehicle stocks
• Consumer Durables: Gained 3%, reflecting strength in discretionary demand
• Realty: Rose 2%, driven by expectations of improved urban consumption
• Metal, FMCG, Telecom, and Private Banks: Each closed around 1% higher

However, some sectors lagged:

• IT, Media, and Power indices saw mild declines amid concerns over global demand and sector-specific pressures.

On the broader market front, both midcaps and smallcaps saw substantial buying:

• BSE Midcap Index: +1%
• BSE Smallcap Index: +1.4%

Key Catalyst: GST Reform Announcement Boosts Sentiment

The primary driver behind Monday’s rally was news surrounding the government’s intent to simplify the GST structure, potentially merging existing slabs into two primary rates — 5% and 18%, while maintaining a 40% sin tax for demerit goods.

Market participants welcomed the move, expecting it to:

• Reduce compliance complexity
• Enhance ease of doing business
• Boost consumption and demand, particularly in discretionary categories

Experts and brokerage houses believe this reform could have a transformative impact on the economy.

Brokerage Views:

• MK Global stated that this could lead to a re-rating of Indian equities, upgrading its Nifty target to 28,000.
• The firm also highlighted that the GST reform resolves near-term concerns around weak earnings and tepid growth.

Technical Outlook: Signs of a Reversal

Despite the strong open, the Nifty could not hold its intraday highs, showing signs of resistance near the 25,000 mark. A small red candle with a long upper shadow was formed on the daily chart, indicating profit booking at higher levels.

However, analysts believe the overall technical setup remains constructive:

Nagaraj Shetti, HDFC Securities:

• A small red candle with a gap-up opening was formed, hinting at a potential trend reversal pattern.
• If the upside gap formed on Monday remains unfilled in the coming sessions, it may be considered a bullish breakaway gap — often seen at the start of a major trend reversal.
• The recent swing low of 24,337 (August 8) is likely to act as a short-term bottom.
• Next upside target: 25,250
• Immediate support: 24,700

Amrita Shinde, Choice Broking:

• A decisive breakout above 24,750 could open the path toward 24,900 and 25,000.
• Key support zones at 24,600 and 24,500 offer strong entry points for new long positions.

Rupak Dey, LKP Securities:

• Nifty faced selling pressure near 25,000, indicating short-term resistance.
• However, the sentiment remains bullish, and the index is likely to retest 25,000 in the near term.
• A breakout above this level could lead to a sustained rally.
• On the downside, support at 24,800, followed by 24,500, will be critical.

Outlook for August 19: Can the Momentum Continue?

The market appears to have entered a short-term bullish phase, supported by strong macro indicators, policy clarity, and encouraging technical signals. However, volatility around key resistance levels—particularly near the psychological barrier of 25,000—could result in some consolidation or profit-taking.

Key Levels to Watch:

• Resistance: 25,000 and 25,250
• Support: 24,800, followed by 24,700 and 24,500

The strength and sustainability of the current rally will depend on how the index behaves around these crucial levels. A clean breakout above 25,000 could open the door for a move toward 25,250–25,500. Conversely, a break below 24,700 may signal a temporary pause.

Investor Strategy: Watch for Confirmations

Given the improving sentiment, investors may consider adding long positions on dips near key support levels. However, it’s important to wait for confirmation of a breakout above 25,000 before chasing momentum.

With macro triggers such as the GST overhaul and potential for earnings upgrades, the broader trend remains positive—but traders should remain mindful of global cues, sector rotation, and upcoming economic data.

Bottom Line:
The sharp rally on August 18 suggests that markets may have found a short-term bottom. If key support levels hold and the bullish gap remains intact, the Nifty could be poised for a breakout. All eyes are now on whether the index can decisively surpass 25,000 on August 19 and sustain the momentum.