Stock markets rally in early trade amid US trade talk optimism

Mumbai: Benchmark equity indices Sensex and Nifty rallied in initial trade on Wednesday following positive day-long discussions with the visiting US team on a bilateral trade deal with both sides agreeing to push for an early and mutually beneficial conclusion of the agreement.

The 30-share BSE Sensex rallied 262.74 points to 82,643.43 in early trade. The 50-share NSE Nifty climbed 85.25 points to 25,324.35.

From the Sensex firms, Bharat Electronics, UltraTech Cement, Trent, Larsen & Toubro, Tata Consultancy Services, HCL Tech, Infosys and Tech Mahindra were among the major gainers.

However, Adani Ports, Mahindra & Mahindra, Tata Steel and Eternal were among the laggards.

"The ongoing rally in the market is being driven by a combination of positive sentiments and fundamentals. The market expects the renewed India-US trade talks to result in an agreement, culminating in the withdrawal of the 25 per cent penal tariffs imposed on India. If expectations translate into reality, that would be a huge sentiment positive," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

Fundamentally, the GST reform is expected to trigger an impressive demand spurt led by automobiles, he added.

The day-long discussions with the visiting US team on a bilateral trade deal were positive, and both sides agreed to push for an early and mutually beneficial conclusion of the agreement, the Commerce Ministry said on Tuesday.

"It was decided to intensify efforts to achieve early conclusion of a mutually beneficial trade agreement," the ministry said in a statement after a day-long meeting with the US officials.

In Asian markets, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng traded in positive territory while South Korea's Kospi quoted lower.

US markets ended lower on Tuesday.

"The Fed is expected to cut rates by 25 bps tonight. More than the rate action the Fed commentary on the evolving economic outlook and the trajectory of future rate action will be closely watched by the market," Vijayakumar said.

Global oil benchmark Brent crude dipped 0.16 per cent to USD 68.36 a barrel.

Foreign institutional investors (FIIs) turned buyers on Tuesday. They bought equities worth Rs 308.32 crore, according to exchange data.

On Tuesday, the Sensex jumped 594.95 points or 0.73 per cent to settle at 82,380.69. The Nifty climbed 169.90 points or 0.68 per cent to 25,239.10.