Indian Markets Surge with Optimism on Potential India-US Trade Deal

In a robust close to the trading day, Indian equity indices soared, buoyed by favorable global cues and renewed optimism around a potential trade agreement between India and the United States. The BSE Sensex leapt forward by 1,200.18 points, a rise of 1.48%, closing at 82,530.74, while the Nifty 50 climbed 395.20 points, or 1.60%, to settle at 25,062.10.

Advancing stocks outpaced decliners considerably, with 2,511 companies moving higher compared to 1,302 losers, and 139 remaining unchanged. Hero MotoCorp, JSW Steel, Trent, Tata Motors, and HCL Technologies emerged as top gainers on the NSE. Additionally, the India VIX, a measure of market volatility, edged down by 0.52 points to 17.14, indicating a subtle decrease in perceived market shakiness.

According to a Bajaj Broking Research note, "The bullish momentum was sustained by global cues and anticipation of the India-US trade pact." This sentiment was echoed by Vinod Nair, Geojit Investments Limited's Head of Research, who highlighted a drop in domestic inflation and positive US signals as key drivers.

The trading session began on a positive streak at 24,694, with the Nifty 50 initially struggling for direction before recovering later to soar past 25,000, driven by robust buyer interest. Major sectors, including auto, realty, and metals, displayed strong performance, asserting investor confidence further. Supporting this confidence, April's passenger vehicle sales noted a 5.5% increase year-on-year, as reported by the Society of Indian Automobile Manufacturers (SIAM).

On the derivatives front, the market showed a positive breadth with 176 advancing stocks versus 41 declines. Despite an active session in currency trading, where the rupee initially rallied, it closed weaker due to persistent demand for US dollars from oil importers and financial risk managers.

(With inputs from agencies.)