The Indian stock market lit up on August 4, 2025, with Nifty leading a powerful rally, fueled by strong gains in mid-cap, small-cap, and auto sectors. Defending its key 20-week EMA, the market roared back— but can it hold? Get the full breakdown of today’s action, key levels to watch, and what’s next for investors!

On August 4, 2025, the Indian stock market delivered a breathtaking performance, with the Nifty 50 index spearheading a broad-based rally that lifted spirits after a turbulent week. The market opened with a brief dip into negative territory but quickly found its footing, defending its crucial 20-week Exponential Moving Average (EMA) around 24,550–24,600. This triggered a sharp upward move, with mid-cap, small-cap, consumption, and auto sectors stealing the show.

The Nifty 50 surged through the day, supported by standout performances in select large-cap stocks. The auto sector was a key driver, with the Nifty Auto index jumping nearly 1.5%. Consumption-focused indices, including Nifty FMCG and Nifty Consumption, also posted strong gains, signaling robust investor interest in these segments. Mid-cap and small-cap indices, which had faced pressure in recent sessions, bounced back impressively, hinting at a potential shift in market dynamics.

Analysts noted that today’s rally was not limited to a few heavyweights but reflected broad participation across sectors. However, caution remains, as the rally’s staying power depends on whether Nifty can close above key resistance levels. The immediate hurdle lies between 24,650 and 24,750, with a tougher barrier at 24,750–24,850. A decisive move above 25,000 could spark significant short-covering by Foreign Institutional Investors (FIIs), but today’s data suggests limited short-covering so far, keeping markets on edge.

Bank Nifty, while volatile, held its key support zone of 55,200–55,400, with resistance seen at 55,600–55,800. The index showed resilience despite underperforming Nifty last week. With the RBI’s monetary policy announcement looming on August 6, some investors may be positioning cautiously, expecting the repo rate to remain steady at 6.5%.

The market’s upbeat mood was partly attributed to a lack of aggressive selling and pre-policy positioning. However, analysts warn against over-optimism, given Nifty’s recent lower-high, lower-low pattern over five weeks. A single bearish candle could wipe out gains if the market fails to sustain above critical levels. As the 3:30 PM IST close approaches, a strong finish near the day’s high could offer hope for bulls, but global cues and FII activity will remain pivotal.

Looking Ahead:

Investors are advised to stay cautious, with long-term players eyeing “buy-on-dips” opportunities in quality stocks, while short-term traders monitor resistance levels closely. The RBI policy and global developments, including U.S. economic data, will shape the market’s next moves. For now, today’s rally offers a ray of optimism, but sustained momentum is key.

Disclaimer:
Investing in stock markets carries inherent risks. Always conduct thorough research and consult a certified financial advisor before making investment decisions. The information provided is for general purposes and does not constitute financial advice.

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