Indian stock markets ended higher on Thursday after hopes of an early signing of the India–U.S. trade agreement and optimistic global sentiment. The Sensex gained over 350 points, and the Nifty went past 25,500, indicating a very bullish trend.
The rally was partly brought about by reports of advancement in India–U.S. trade negotiations following a fresh U.S.–Vietnam agreement. Investors believe that India would also sign a deal, especially with negotiation on lower tariffs and farm issues on the negotiating table. The possibility of more bilateral trade is being seen as a major driving force behind market euphoria.
Sectoral indices in back home were up on broad-based gains. Auto shares were the major contributors, aided by positive sales momentum and rural demand expansion. Metal and IT shares also aided the upmove, while hopes of global demand and corporate earnings expectation were positives. PSU banks lagged behind due to mixed quarter performance and selling pressure.
Big winners were the likes of ONGC, Maruti Suzuki, Hindalco, Apollo Hospitals, and Mahindra & Mahindra, all of which rose by 1.5% to 2%. However, Avenue Supermarts and Nykaa saw the stock price drop after poor revenue guidance and stake sale by early investors, respectively.
Global pointers continued to keep the positive mood alive. Most Asian markets closed on a positive note, following the showings on Wall Street. Indian markets were also supported by the 0.8% fall in crude oil prices that held inflationary pressure in check. Falling energy prices are being considered a boon for India’s import-based economy.
Technically, the Nifty remains strong above 25,500. Market analysts note that if the index holds at this level and breaches 25,600–25,700, there would be a rally to 26,200. But extremely strong resistance still exists in higher levels, and profit selling is likely if any global concerns creep in.
Generally, the market continues to be supported by hopes for a resolution in global trade and domestic macroeconomic strength. Going forward, investors will be closely monitoring events on the trade front, inflation reports, and Q1 earnings guidance for additional direction.