India’s equity markets extended their winning streak to a sixth consecutive session on August 21, 2025, reflecting resilience in the domestic economy and investor optimism about policy reforms. The Nifty 50 rose 0.28% to 25,120.3, while the Sensex climbed 0.35% to 82,146.4.

The rally was driven by strong performance in financials and Reliance Industries, even as information technology stocks underperformed amid global uncertainties. Investors continued to weigh domestic growth prospects against external risks, including U.S. interest rate policy and geopolitical tensions.

Financials Lead the Rally

The financial sector, particularly insurance companies, provided the bulk of gains in Indian equities. The market responded positively to a proposed tax exemption on insurance premiums, which could stimulate household spending and boost insurance penetration.

Banks and non-banking financial companies (NBFCs) also supported the rally. Strong asset quality, improving credit growth, and stable loan demand helped underpin investor confidence. Analysts noted that financials are benefiting from both policy tailwinds and solid fundamentals, making them a preferred sector amid market volatility.

Insurers such as HDFC Life and ICICI Prudential Life saw notable gains, while major banks showed moderate upward momentum. The combination of policy incentives and strong sector earnings expectations is expected to continue driving investor interest.

Reliance Industries Boosts Energy Sector

Reliance Industries surged 1.2%, lifting the broader oil and gas index. The conglomerate’s diversified operations—from petrochemicals and refining to digital services and renewable energy—continue to attract investor interest.

Reliance’s positive momentum reinforced the performance of related energy stocks, creating a sector-wide uplift. Analysts emphasize that strategic investments in renewables and digital platforms enhance the company’s long-term growth profile, making it a favorite among institutional investors.

Foreign portfolio investors have also increased allocations to Reliance and its peers, reflecting confidence in the company’s ability to generate stable cash flows despite global uncertainties.

IT Sector Lags Ahead of Jackson Hole

India’s information technology sector lagged during the session, reflecting investor caution before Federal Reserve Chair Jerome Powell’s Jackson Hole speech. With significant revenue exposure to the U.S., IT firms are sensitive to interest rate expectations, trade dynamics, and currency fluctuations.

Companies like Tata Consultancy Services (TCS) and Infosys experienced subdued trading, as market participants waited for signals on global monetary policy. Analysts warned that near-term performance may remain uneven until central bank guidance clarifies the trajectory for U.S. interest rates and global demand for IT services.

Broader Market Outlook

Despite selective underperformance, Indian equities show resilience amid global headwinds. Key factors influencing market sentiment include:

• Foreign Institutional Investor (FII) flows: Recent inflows have supported liquidity, particularly in financials and energy sectors.

• Policy reforms: Government initiatives in insurance, infrastructure, and renewable energy sectors continue to boost confidence.

• Corporate earnings: Strong results from conglomerates and banks reinforce optimism for continued growth.

• Global macro trends: Oil price fluctuations, U.S. interest rate policy, and geopolitical developments remain key market drivers.

Analysts suggest that sector rotation is likely to continue, with financials, energy, and consumer discretionary outperforming more cyclical or globally exposed sectors.

Investor Sentiment

Investor sentiment remains constructive but cautious. Domestic retail participation complements institutional buying, reflecting confidence in India’s growth story. Analysts highlight that insurance reforms, fiscal incentives, and strategic corporate investments provide a structural boost to equity markets.

While global events like Jackson Hole may create short-term volatility, domestic policy support and corporate fundamentals are expected to sustain the upward trajectory in key sectors.

Technical Indicators

From a technical perspective, Nifty 50 support lies near 24,900, while resistance sits at 25,250. A sustained move above resistance could signal further upside momentum. Similarly, the Sensex may face near-term resistance around 82,300, with support levels near 81,800.

Technical analysts suggest that investors adopt a selective approach, focusing on fundamentally strong sectors such as financials, energy, and select consumer discretionary stocks.