Trade Deal Ignites Rally
The Indian stock markets experienced an electrifying bull run, with the benchmark Sensex registering a monumental jump of 2,072.67 points, culminating
at 83,739.13. This significant upward movement, representing a 2.54 per cent gain, was primarily attributed to the enthusiastic reception of the long-awaited India-US trade agreement. The positive sentiment permeated Dalal Street, leading to a broad-based rally. Alongside the Sensex, the Nifty also posted impressive gains, climbing 639.15 points, or 2.55 per cent, to conclude the trading day at 25,727.55. Analysts pointed out key resistance levels at 25,900–26,000, while highlighting the crucial support zone between 25,500–25,600. This surge was directly triggered by an announcement from US President Donald Trump regarding a reduction in reciprocal tariffs on Indian goods to 18 per cent. This development significantly bolstered the confidence of market participants, who anticipate that enhanced trade relations will prove beneficial for Indian enterprises and the nation's economic landscape.
Heavyweights Lead Charge
The jubilant mood on the trading floor was evident as several prominent stocks within the Sensex basket spearheaded the market's ascent. Companies such as Adani Ports, Bajaj Finance, IndiGo, and PowerGrid demonstrated robust performance, recording substantial gains throughout the trading session. In contrast to this widespread optimism, only a couple of stocks, namely Tech Mahindra and Bharat Electronics Limited (BEL), concluded the day with minor losses, underscoring the pervasive positive sentiment. The broader market also mirrored this enthusiasm, with every sectoral index closing in the green. The real estate sector, represented by the Nifty Realty index, emerged as the top performer, soaring by an impressive margin of over 4 per cent. Other vital sectors, including chemicals, pharmaceuticals, and consumer durables, also witnessed considerable buying interest, with their respective indices advancing by more than 3 per cent each. This widespread participation across diverse market segments indicated a strong underlying belief in the market's upward trajectory.
Broader Market Joins In
The positive momentum wasn't confined to the large-cap segment; the broader market indices also participated vigorously in the day's rally. The Nifty MidCap 100 index witnessed a healthy advance of 2.84 per cent, while the Nifty SmallCap 100 index also posted a commendable gain of 2.82 per cent. Market experts attributed this widespread participation to heightened investor confidence, which was significantly boosted by the favourable developments on the trade front and the optimistic outlook for economic prospects. The favourable trade agreement is expected to pave the way for increased foreign institutional investor (FII) inflows, further strengthening the market. This broad-based participation across mid-cap and small-cap stocks suggests that investors are optimistic about the growth potential of a wider range of companies, not just the market leaders, driven by the positive macroeconomic indicators and improved trade dynamics.
Rupee Sees Major Boost
Adding to the day's positive narrative, the Indian Rupee experienced a significant appreciation against the US Dollar, marking its most robust single-day gain since December 2018. The national currency strengthened by a substantial Rs 1.28, representing a nearly 1.40 per cent increase, following the announcement of the US-India trade deal. This sharp upward movement in the rupee reflects increased investor confidence in the Indian economy and the potential for improved trade balances. A stronger rupee typically benefits importers by reducing the cost of foreign goods, while also potentially attracting foreign investment due to its stability. The positive impact on the currency further bolstered the overall market sentiment, creating a virtuous cycle of optimism that encouraged both domestic and international investors to participate actively in the equity markets. The strengthening rupee signals a vote of confidence in India's economic resilience and its growing trade partnerships.
