Markets climb in early trade on India-US trade deal optimism

Mumbai: Equity benchmark indices Sensex and Nifty climbed in early trade on Wednesday driven by buying in blue-chips Reliance Industries, Infosys and Bharti Airtel amid firm global cues.

Besides, traders said that optimism over an impending India-US trade deal also supported the investors’ sentiment.

The 30-share BSE Sensex benchmark increased by 464.66 points, or 0.55 per cent, to 84,335.98 in early trade. The 50-share NSE Nifty appreciated by 134.70 points, or 0.52 per cent, to 25,829.65.

Among the Sensex firms, Tata Consultancy Services, Eternal, Bajaj Finserv, Tech Mahindra, Infosys, Bharti Airtel, Bajaj Finance, HCL Technologies, Reliance Industries, Axis Bank, Mahindra & Mahindra, and UltraTech Cement were the gainers.

Bharat Electronics Ltd, Hindustan Unilever, Maruti Suzuki India, Asian Paints, ITC, Sun Pharmaceuticals, and Trent Ltd were among the laggards.

"Sentiments have turned for the better with news of an India-US trade deal getting finalised soon and the exit polls indicating a decisive victory for the NDA in Bihar. This will strengthen the bulls but is not good enough for the markets to stage a decisive breakout and sustained rally," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

He noted that going by the present trends, FIIs are likely to sell again at higher levels. So long as the AI trade continues a sustained reversal of FII money appears unlikely.

"From the fundamental perspective, there is room for optimism since GDP growth is robust and earnings growth for FY27 appears bright. Financials, consumption and defence stocks have the potential to lead the next leg of the rally, Vijayakumar added.

Broader Asian equities were trading on a mixed note. South Korea's Kospi and Hong Kong's Hang Seng were trading higher while Japan's Nikkei 225 and Shanghai's SSE Composite index were quoting in the negative territory.

The US markets closed largely higher in overnight deals on Tuesday.

Brent crude, the global oil benchmark, declined by 0.23 per cent to USD 65.01 per barrel.

Foreign Institutional Investors (FII) offloaded equities worth Rs 803.22 crore on Tuesday while Domestic Institutional Investors bought stocks worth Rs 2,188.47 crore, according to the exchange data.

"Bulls took charge on Tuesday as Nifty staged a strong comeback, buoyed by exit polls in Bihar predicting a BJP–JD(U) landslide and optimism over a US-India trade deal, possible Fed rate cuts, and hopes of an end to the US shutdown. While sentiment is upbeat, concerns linger over the Delhi bomb blast and FII selling worth Rs 803 crore," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

On Tuesday, the 30-share BSE Sensex jumped 335.97 points to settle at 83,871.32, while the NSE Nifty climbed 120.60 points to close at 25,694.95.