Why Is the Stock Market Up Today? Top 3 Reasons Behind the Sensex and Nifty Rise

Why Is the Stock Market Up Today? Top 3 Reasons Behind the Sensex and Nifty Rise

Indian equity markets witnessed a strong recovery during Thursday's session, August 20, 2026, after facing sustained selling pressure in recent sessions.

The Sensex gained more than 600 points, touching an intraday high of 77,514, while the Nifty 50 reclaimed the 24,200 mark.

Around 12:10 PM, the Sensex was trading around 77,442, up 532 points or 0.69%, while the Nifty 50 was at 24,214, up 136 points or 0.56%.

The broader market also participated in the recovery. The Nifty Midcap 150 was up around 0.69%, while the Nifty Smallcap 250 gained around 0.88%.

The total market capitalisation of BSE-listed companies increased to more than ₹492 lakh crore, compared with ₹488.70 lakh crore in the previous session.

Here are the three key factors behind Thursday's market recovery.

1. Short Covering After Recent Correction

One of the major reasons behind the recovery was short covering following the recent market correction.

The Nifty 50 had declined for seven consecutive sessions through Wednesday, while the Sensex had fallen for four straight sessions.

Over those seven sessions, the Nifty had declined around 2%, while the Sensex had lost approximately 1.5% over four sessions.

The extended decline pushed the benchmarks towards oversold conditions, increasing the possibility of a technical recovery.

Market experts pointed to short covering as one of the factors supporting Thursday's rebound.

According to the market view cited in the source, the recent downtrend had created an oversold setup, allowing a short-term reversal to emerge.

2. Softer US Dollar and Bond Yields

Another important factor was the decline in the US dollar index and US Treasury yields.

A stronger dollar and rising US bond yields had previously increased concerns about potential foreign capital outflows from emerging markets such as India.

The decline in these indicators helped improve global risk sentiment.

The US Dollar Index declined around 0.83% on August 19, while the US 10-year Treasury yield also fell following developments related to US Treasury liquidity and bond buyback operations.

During Thursday's session, the 10-year US Treasury yield declined further to around 4.64%.

Lower bond yields can reduce pressure on emerging-market equities by making global fixed-income assets relatively less attractive and easing concerns around foreign fund flows.

3. Continued FPI Buying

Foreign portfolio investor activity was another factor supporting the Indian market.

FPIs purchased Indian equities worth approximately ₹408 crore in the cash segment on Wednesday.

According to the data cited in the source, FPIs had purchased Indian equities worth around ₹23,320 crore during August up to August 19.

This followed FPI buying of approximately ₹20,200 crore in July.

Continued foreign buying provides an important liquidity support for domestic equities, particularly when the broader market is attempting to recover from a correction.

Stocks Contributing to the Nifty 50 Rally

Several large-cap stocks contributed to the Nifty 50's recovery during Thursday's session.

The top contributors around 12:30 PM included

• HDFC Bank
• Bharti Airtel
• Eternal
• Bajaj Finance
• Kotak Mahindra Bank

These stocks played an important role in supporting the benchmark index during the intraday recovery.

Stocks Contributing to the Sensex Rally

The major contributors to the Sensex around 12:30 PM included

• HDFC Bank
• Bharti Airtel
• Bajaj Finance
• Larsen & Toubro
• Eternal

The strength in major index constituents helped the benchmark recover sharply after its recent losing streak.

Broader Market Also Recovers

The recovery was not limited to the major benchmark indices.

The Nifty Midcap 150 and Nifty Smallcap 250 also recorded gains during the session.

This indicates that market participation was relatively broad, rather than being restricted only to a handful of large-cap stocks.

However, the sustainability of the recovery will depend on whether the broader market can maintain momentum after the recent correction.

What to Watch Next

Investors and market participants may closely monitor several factors in the coming sessions.

Global Cues

Movements in US Treasury yields, the US dollar and global equity markets could continue to influence Indian market sentiment.

FPI Flows

Sustained foreign portfolio inflows could provide additional liquidity support, while a reversal in FPI flows could increase volatility.

Crude Oil Prices

Elevated crude oil prices remain an important consideration for India because of the country's dependence on imported energy.

Technical Structure

After seven consecutive declining sessions, the Nifty's ability to sustain the recovery will be an important technical development.

Key Takeaways

• The Sensex rose more than 600 points during Thursday's session.
• The Nifty 50 reclaimed 24,200.
• Short covering after the recent correction supported the recovery.
• A softer US dollar and lower US Treasury yields improved global risk sentiment.
• FPI buying provided additional support to Indian equities.
• HDFC Bank, Bharti Airtel, Eternal, Bajaj Finance and Kotak Mahindra Bank were among the major Nifty contributors.
• HDFC Bank, Bharti Airtel, Bajaj Finance, L&T and Eternal were among the key Sensex contributors.
• Global markets, crude oil, FPI flows and bond yields remain important factors to monitor.

Disclaimer

This article is published solely for educational and informational purposes.

TrendRipperX is not registered with the Securities and Exchange Board of India (SEBI) as an Investment Adviser or Research Analyst.

The information presented is based on publicly available information and market observations attributed to market experts and financial data sources.

Nothing in this article should be interpreted as a buy, sell, hold, entry, exit, target or stop-loss recommendation from TrendRipperX.

Readers should conduct their own independent research and consult a SEBI-registered financial professional before making any investment decision.