Stock Market Outlook: Bullish Signals Emerge as Sensex Gains Momentum; Nifty Eyes Next Resistance Near 25,200

As investors look ahead to the trading session on August 26, 2025, several key factors are expected to influence market sentiment and direction. One of the primary areas of focus will be whether the Nifty can sustain above the crucial 25,000 mark, which it nearly touched in the previous session.

Stock Market Outlook for August 26

Indian equity markets closed higher on August 25, 2025, with benchmark indices continuing their upward momentum. The NSE Nifty50 inched closer to the psychological 25,000 mark, closing just below it, while the BSE Sensex saw a significant gain of over 300 points. As investors gear up for the trading session on August 26, here's a detailed outlook on what to expect from the markets.

Sensex, Nifty Prediction Today

The BSE Sensex ended the day with a gain of 329.06 points, or 0.40%, settling at 81,635.91, while the NSE Nifty rose 97.65 points, or 0.39%, to close at 24,967.75. The markets showed resilience despite global uncertainties and cautious sentiment among investors. A total of 1,830 stocks advanced on the BSE, while 2,169 declined, and 178 remained unchanged, indicating a mixed breadth.

The rally was driven primarily by IT stocks, with the Nifty IT index gaining 2.4%. Major contributors to the rally included Infosys, TCS, HCL Technologies, and Wipro, all of which saw gains between 2.5% to 3.1%. Notably, Infosys surged 3.1%, and TCS gained 2.8%, leading the tech pack. These gains came on the back of global cues following U.S. Federal Reserve Chair Jerome Powell's comments at Jackson Hole.

Technical Outlook for Nifty50 on August 26

From a technical standpoint, the Nifty index opened strong around 24,950 levels and, after some initial dips, found strong support around 24,900 zones, which acted as a technical floor for multiple rebounds throughout the session. The index managed to climb back and briefly cross the 25,000 mark, forming a bullish candle with long shadows, indicating indecision but underlying buying interest.

According to data from MOSt Market Roundup, Nifty needs to sustain above 25,000 for a continuation of the bullish trend. If it holds, the next resistance levels are seen at 25,150 and 25,250 zones. On the downside, key support levels have shifted upward to 24,700, followed by 24,600.

"Nifty index opened positive near 24950 zones and after the dip in the initial hour, it took support from 24900 zones and witnessed a comeback of the bulls using this zone as a technical floor for multiple rebounds. It attempted and crossed the psychological 25k marks. Options data reinforced the range bound theme indicating that market participants anticipate limited movement until a clear decisive breakout," stated the analyst at Motilal Oswal Financial Services.

What's Driving Market Sentiment and Trading Ahead? Check Expert's View

Vinod Nair, Head of Research at Geojit Financial Services, noted, "The domestic market remained enthusiastic today, buoyed by expectations of a Fed rate cut and a subsequent fall in 10-year bond yields in the U.S. The IT sector led the rally due to favorable global sentiment. Meanwhile, proposed GST reforms and a good monsoon season have created positive sentiment in the consumption-driven domestic economy."

Fed's Dovish Tone Boosts Indian Markets' Sentiments, But Upcoming U.S. Tariffs Pose Risks

The rally in Indian equities followed dovish signals from the U.S. Fed, where Jerome Powell suggested the possibility of a rate cut as early as September, citing rising risks to the U.S. labor market. This move could result in lower U.S. bond yields, making emerging market equities, including India's, more attractive to global investors.

However, there are potential headwinds on the horizon. Markets remain cautious ahead of new U.S. tariffs, with a proposed 25% levy on select Indian goods scheduled to take effect on August 27. These could raise total duties up to 50%, putting pressure on export-driven sectors.

Sector-wise Stock Market Performance Updates

Beyond IT, other sectors showed moderate gains. The realty index was up 0.7%, and the metal index gained 0.6%. Stocks such as Hindalco Industries and Tata Motors also contributed to the broader market gains.

On the flip side, some stocks underperformed. Apollo Hospitals, Nestle India, Adani Enterprises, Bharat Electronics, and SBI Life were among the top laggards on the Nifty, capping gains for the benchmark.

Despite positive momentum in large caps, the BSE Midcap and Smallcap indices ended flat, with early gains getting erased by market close. These indices, which are typically more sensitive to domestic developments and investor risk appetite, were likely impacted by profit booking and caution ahead of global trade policy developments.

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