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The Indian stock market experienced a robust upswing on October 25th, driven by strong performance in the financial sector. The Sensex, a benchmark index of the Bombay Stock Exchange, surged by a significant 694 points (0.88%) to close at 79,476, reflecting a positive investor sentiment. The Nifty, the National Stock Exchange's primary index, mirrored the Sensex's upward trajectory, adding 218 points (0.91%) to finish at 24,213.
The market's surge was primarily attributed to the robust performance of financial stocks, which played a pivotal role in propelling the overall gains. Leading the rally were prominent financial institutions such as Axis Bank, IndusInd Bank, and HDFC Bank. These banks witnessed substantial advances, ranging between 2% and 4.7%, demonstrating investor confidence in the sector's prospects. This positive sentiment towards financials is likely fueled by expectations of a robust economic recovery and increased lending activities.
The market's upward trend, however, was not entirely smooth. While the Sensex and Nifty concluded the day on a strong note, the session witnessed considerable volatility with intraday dips of 0.6%. This fluctuation is partly attributed to the impending U.S. election, which is anticipated to bring heightened uncertainty and market volatility. As analysts predict a tight race between Kamala Harris and Donald Trump, the potential outcome of the election is expected to significantly influence global markets, including the Indian market.
Beyond the immediate focus on the U.S. election, the market's performance also reflects positive domestic factors. The strong performance of the manufacturing sector and anticipated stimulus measures from China have contributed to a recovery-driven sentiment. Analysts like Vinod Nair from Geojit Financial Services highlight the positive influence of domestic manufacturing on the market's upward trajectory. Furthermore, technical indicators, including a bullish reversal signal observed by Rupak De from LKP Securities, suggest a favorable environment for a buy-on-dips strategy, reinforcing investor confidence.
The global market landscape also contributed to the overall sentiment. While European indices experienced minor dips, Asian markets, including China's CSI300, registered gains. Notably, oil prices remained stable ahead of the U.S. election, with Brent crude trading at $75.24 and WTI at $71.65. The Indian rupee closed nearly unchanged at 84.1075 against the dollar, despite foreign outflows and central bank intervention. This relatively stable rupee performance against the dollar adds to the overall positive sentiment surrounding the Indian market.
Source: ET Market Watch: Financials propel Sensex 694 points up ahead of US polls