Markets surge over 1.5% amid optimism over US-India trade deal

Synopsis

Foreign portfolio investors net bought shares worth ₹5,393 crore on Thursday, taking their total purchase tally for May to ₹17,142 crore. In April, they were buyers to the tune of ₹3416 crore. Domestic institutions were sellers to the tune of ₹1,668 crore on Thursday.

Mumbai: Indian benchmark indices ended over 1.5% higher on Thursday, recovering from a weak opening, with the Nifty closing above 25,000 for the first time in seven months after US president Donald Trump claimed that India has offered to drop all tariffs on goods imported from the US, lifting investor sentiment.

NSE's Nifty rose 395.2 points or 1.6% to close at 25,062.1. The index ended above the 25,000 level for the first time since October 15. BSE's Sensex rose 1200.18 points or 1.5% to end at 82,530.74. Both indices had fallen as much as 0.7% earlier in the day. "After Donald Trump's comments today (Thursday), investors are hoping that a US-India trade agreement will be signed soon, which will remove an overhang on the market," said Aamar Deo Singh, senior VP, research, Angel One. "The continued foreign institutional flows are also good news for India." Trump said on Thursday that India had offered a no-tariff trade deal for US goods, a claim that is yet to be confirmed by New Delhi.

Foreign portfolio investors net bought shares worth ₹5,393 crore on Thursday, taking their total purchase tally for May to ₹17,142 crore. In April, they were buyers to the tune of ₹3416 crore. Domestic institutions were sellers to the tune of ₹1,668 crore on Thursday.

Agencies

Elsewhere in Asia, Japan fell 1%, China and South Korea declined 0.7% each, Hong Kong fell 0.8%, and Taiwan dropped 0.2% after the optimism around the US-China trade relations showed signs of fizzling out. At home, the broad market indices underperformed the benchmarks, with the Nifty Midcap 150 and Nifty Small-cap 250 advancing 0.7% each. Nifty's Volatility Index or VIX-the market's fear gauge-eased 1.9% to 16.9 levels on Thursday, pointing to lower risk perception among option traders. The index has fallen by over 24% in the last five trading sessions. Technical indicators are showing a likely slowdown in the bullish momentum.

"Given the geopolitical uncertainties, some profit-booking at higher levels would be advisable," said Mehul Kothari, deputy VP, technical research at Anand Rathi Shares and Stock Brokers. The Nifty may face resistance in the zone of 25,000-25,300, he said.

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