Sensex and Nifty Surge Amid Positive U.S. Trade Talks

Indian stock indices, Sensex and Nifty, soared due to smooth U.S. trade negotiations and positive Asian markets. Sensex rose by 1.27% while Nifty increased by 1.20%. Despite geopolitical tensions, sustained FII buying propelled gains. Experts advise caution due to unresolved retaliation impacts from a recent terror attack.

In an impressive start to the trading week, India's leading stock indices, Sensex and Nifty, witnessed significant growth driven by encouraging trade discussions with the United States and favorable signals from Asian markets. The Sensex concluded the day at an impressive 80,218.37 points, marking a rise of 1,005.84 points or 1.27 per cent. Meanwhile, the Nifty saw an increase of 289.15 points, closing at 24,328.50 points, up by 1.20 per cent.

Despite the recent uptick, the Sensex still trails its all-time high of 85,978 points reached in September 2024 by 6,000 points. Notably, the PSU Bank sector experienced the largest surge among sectoral indices, rising by 2.44 per cent, as per NSE data.

Commenting on the market dynamics, VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, highlighted how markets often defy apprehensions. He pointed out that the resilient performance is bolstered by a dramatic shift in foreign institutional investors' (FII) strategy from sustained selling to buying, primarily because of the underperformance of U.S. stocks, bonds, and the dollar in a weakening U.S. economy.

Vinod Nair, Head of Research at Geojit Investments Limited, noted that the domestic market recovered losses incurred towards the end of last week due to border tensions. He emphasized that continuous FII activity and robust results from major companies like RIL contributed to positive investor sentiment. The weakening dollar and inflationary pressures in the U.S. might further attract foreign investors. Nonetheless, Nair cautioned investors about potential market volatility due to the unresolved response to the Pahalgam terror attack.

Previously, geopolitical tensions from the Pahalgam incident had adversely affected the market, wiping out overall weekly gains. This downturn followed a period of seven consecutive positive trading sessions driven by U.S. President Trump's temporary suspension of reciprocal tariffs, which initially led to a global equity sell-off, affecting India as well.

(With inputs from agencies.)