The Indian stock market ended on a positive note, with the Nifty 50 climbing 98 points to close at 24,968.00, while the Sensex advanced 329 points to finish at 81,636.00. The day's rally was primarily driven by strong performance in the IT sector, with paper stocks also showing significant gains following changes in import regulations.

IT Sector Leads the Charge

The information technology sector emerged as the star performer of the day, with the Nifty IT index surging 2.30%. Four out of the top five Nifty gainers were IT companies:

• TCS (Tata Consultancy Services)
• Infosys
• HCLTech
• Wipro

These tech giants saw their stock prices rise between 1.50% to 3.00%, buoyed by positive brokerage coverage. The strong performance of these IT heavyweights played a crucial role in lifting the overall market sentiment.

Paper Stocks Soar on Import Norm Tightening

Paper stocks witnessed a remarkable surge following the government's decision to tighten import norms for the sector. This move led to significant gains for several paper companies:

These stocks experienced substantial jumps, reflecting investor optimism about the potential benefits of the new import regulations for domestic paper manufacturers.

Mixed Performance Across Other Sectors

While IT and paper stocks shone, other sectors showed mixed results:

• Hero MotoCorp and IndusInd Bank gained 1-2%, despite their upcoming exclusion from the Nifty 50 index.
• Vodafone Idea extended its recent positive momentum, closing 5.00% higher.
• Capital market stocks faced some pressure, with BSE Ltd and Angel One declining by 2-3%.

Market Breadth and Overall Sentiment

Despite the gains in the benchmark indices, the broader market sentiment remained somewhat cautious. The market breadth was tilted towards the negative side, with the number of declining stocks outpacing advancing ones at a ratio of 5:4.

This mixed market breadth suggests that while certain sectors and stocks performed well, there was still some underlying weakness in the overall market. Investors may be selectively focusing on specific sectors and stocks rather than displaying broad-based optimism.

As the Indian stock market continues to navigate through various domestic and global factors, investors are advised to keep a close watch on sector-specific developments and regulatory changes that could impact stock performances in the coming days.

The Indian stock market witnessed a mixed week as benchmark indices Nifty 50 and Sensex advanced nearly 1% for the second consecutive week. This upward movement was primarily driven by optimism surrounding the potential GST rate overhaul and S&P Global Ratings' upgrade of India's sovereign outlook. However, the rally faced headwinds as the Nifty 50 struggled to breach a key technical level.

Technical Resistance and Bearish Pattern

The Nifty 50 encountered significant resistance at the 61.8% Fibonacci retracement level of 25,153. This technical barrier triggered profit booking among investors, leading to the formation of a bearish Evening Star candlestick pattern. This pattern often signals a potential reversal in the short-term trend and may warrant caution among technical analysts.

Foreign Institutional Investors (FIIs) Continue Selling

Despite the overall positive sentiment, Foreign Institutional Investors (FIIs) maintained their selling stance in the Indian equity markets. In August alone, FIIs offloaded Rs 25,564.00 crore through exchanges. This selling spree has brought the total equity selling by FIIs to Rs 1,57,440.00 crore.

Domestic Institutional Investors Provide Support

Interestingly, despite the heavy FII outflows, the Nifty has shown resilience, correcting only 3.11% from its June highs. This stability can be attributed to strong support from domestic institutional investors, who have injected Rs 66,184.00 crore into the market since August.

Sector-wise Performance

Banking Sector Underperforms

The banking sector, represented by the Bank Nifty index, underperformed the broader market. It declined by 0.35% and hit a 65-day low relative to the Nifty, indicating weakness in the financial services sector.

Consumer Durables Surge

The consumer durables sector emerged as a strong performer, surging nearly 4%. This uptick followed the Prime Minister's announcement regarding GST reduction, potentially boosting consumer sentiment in this segment.

Auto Sector Breakout

The auto sector demonstrated significant strength, breaking out from a 13-week consolidation period with over 5% gains. This breakout could signal renewed investor interest in automotive stocks.

Key Levels to Watch

Investors and traders should keep an eye on the following key levels for the Nifty 50:

As the market navigates through these technical levels and absorbs the impact of FII selling and domestic buying, investors are advised to monitor these developments closely. The interplay between global cues, domestic economic factors, and sector-specific movements will likely shape the market's direction in the coming sessions.