The Nifty benchmark closed above 25,800, coming within 75 points of 26,000 during the day, and gaining about 4% in a year. The all-time high for the gauge is 26,277, recorded on September 27 last year. The Sensex climbed more than 400 points Monday.
The customary Diwali Muhurat trading on the bourses is scheduled for Tuesday afternoon.
The Nifty’s advance was driven not by one or two pockets alone, but by a strong showing from public-sector banks and IT stocks, which led a market rally underpinned by positive sentiment domestically and decent global cues.
“As the festive spirit of Diwali fills the air with optimism and celebration, the Indian equity markets have mirrored the mood with a strong start to the week,” said Sudeep Shah, Head – Technical Research & Derivatives at SBI Securities.
The BSE Sensex climbed 411.2 points, or 0.5%, to close at 84,363. The NSE Nifty-50 edged 133.3 points, or 0.5%, ending at 25,843. Intraday Nifty hit a 52-week high of 25,926.2.Beyond the auto index that lagged, virtually all sectoral indices posted gains. In particular, the Nifty PSU Bank and Nifty Oil & Gas indices emerged as the top performers, indicating that institutional money is rotating into financials, especially state-run lenders.The PSU Bank index surged nearly 3%, while the Nifty Oil & Gas and Nifty IT gauges advanced 1.4% and 1%, respectively.
The Volatility Index or VIX-the market’s fear measure-plunged 2.32% to 11.36, in line with the rise in indices, indicating options traders see lower risks in the near term.
The broader market also went up marginally, with Nifty Midcap 150 jumping 0.6% and the Nifty Smallcap 250 gaining 0.5%.
Of the 4,464 stocks traded on the BSE, 2,447 advanced, while 1,835 declined.
“The market’s strength was underpinned by upbeat quarterly results from heavyweights such as Reliance, HDFC Bank, and ICICI Bank, along with expectations of sustained foreign inflows amid improving global risk sentiment,” said Ajit Mishra, Senior Vice President-Research at Religare Broking.
However, Mishra advised caution given the quick pace of the recent rally.
“As the Nifty approaches the 26,000 mark, some consolidation cannot be ruled out before a fresh breakout; however, the overall bias remains positive, with immediate support around 25,650 and major support near 25,450,” he said.
He recommended a “buy on dips” approach, focusing on large-cap and quality midcap stocks.
From a technical perspective, Nilesh Jain, Head of Technical & Derivatives Research at Centrum Broking, believes a brief pause in the uptrend may be possible. “At current levels, the risk-reward ratio appears unfavourable for fresh entries, hence buying on dips would be a prudent strategy.”