Indian Markets Celebrate Diwali With Strong Gains: Sensex Jumps 661 Points, Nifty Reaches 25,901

The Bank Nifty index reached a fresh record high, increasing by 0.7 percent as markets celebrated Diwali.

Indian stock markets experienced a brilliant start during Diwali celebrations, with benchmark indices surging more than half a percent in Monday's early trading session.

The Sensex commenced trading with a gain of 661 points, or 0.8 percent, reaching 84,614, while the Nifty rose by 191 points, or 0.74 percent, touching 25,901.

Market experts cautioned that "New long positions should only be considered if the Nifty maintains levels above the 26,000 mark. Though the broader market sentiment remains cautiously optimistic, careful observation of key technical levels and global trends will be essential in upcoming sessions."

Banking and heavyweight stocks witnessed robust buying activity. Among the top gainers on the Sensex were Kotak Mahindra Bank, Axis Bank, HDFC Bank, and Bajaj twins, with increases of up to 3 percent.

Conversely, ICICI Bank emerged as the leading decliner, dropping 2.2 percent as investors secured profits following the bank's Q2 results announcement. Ultratech Cement and Mahindra & Mahindra also traded lower during early deals.

In the broader market spectrum, the Nifty MidCap index advanced by 0.66 percent, while the Nifty SmallCap index moved up by 0.19 percent.

The Bank Nifty index achieved a new record high, climbing 0.7 percent during the trading session.

All major sectoral indices displayed positive performance, with Nifty IT, Private Bank, and Pharma indices leading the rally, each gaining approximately 0.7 percent.

Foreign Institutional Investors (FIIs) continued their buying trend for the second consecutive day, acquiring equities worth Rs 309 crore on October 17, while Domestic Institutional Investors (DIIs) maintained strong support by purchasing equities valued at over Rs 1,526 crore on the same day.

The festive enthusiasm on Dalal Street demonstrated robust investor confidence as markets began the Diwali week on a positive trajectory.

Analysts noted that in the current climate of increased volatility and mixed market signals, traders should adopt a cautious "buy-on-dips" strategy, especially when utilizing leverage.

"Taking partial profits during market rallies and implementing strict trailing stop-losses is advised for effective risk management," they further recommended.