Indian Markets Surge Amid Easing Geopolitical Tensions and Trade Optimism

The Indian stock markets showed a positive trend on Wednesday, influenced by diminished geopolitical tensions and a wave of optimism surrounding potential US Federal Reserve rate cuts. Market dynamics were further strengthened by a productive phone call between US President Donald Trump and Indian Prime Minister Narendra Modi, hinting at improving bilateral relations.

The benchmark indices reflected this optimism, with the Nifty 50 gaining 37.50 points to reach 25,276.60, and the BSE Sensex rising by 118.28 points to 82,498.97. Experts highlighted that renewed US-India trade talks have fueled positive investor sentiment, supported by a US trade delegation currently in India for extensive discussions.

International market analyst Ajay Bagga stated that while US and Asian markets remain cautious, Indian markets are poised for gains. A US tariff de-escalation could significantly boost sentiment, especially with a potential Fed rate cut anticipated that night, expected to encourage emerging market flows due to a weaker US dollar outlook.

India's broader indices also reflected gains, with notable increases across Nifty's sectoral indices, including Auto, FMCG, IT, Media, Metal, and Pharma. Global markets remained cautious before the Fed's decision, despite a rate cut being anticipated. Oil prices ascended on fears of supply disruptions, while gold steadied near record highs on prospective rate cuts.

Asian markets had a mixed morning session, with Japan's Nikkei and Hong Kong's Hang Seng rising slightly, while Singapore's Straits Times and Korea's KOSPI observed declines. Amid these developments, global currencies experienced shifts, with the dollar weakening as the euro, yen, and Swiss franc gained traction.

(With inputs from agencies.)