Equity benchmarks rallied sharply on Friday, with the Sensex and Nifty surging over 2 percent by mid-session, after the United States announced a 90-day pause on additional tariffs on India, fuelling hopes of a bilateral trade agreement (BTA) between the two countries, before the deadline ends.
The BSE Sensex zoomed 1,612.42 points or 2.18 percent to 75,459.57 at around 12:15 PM, while the NSE Nifty advanced 519.65 points or 2.32 percent to 22,918.80. Market sentiment remained positive as over 2,700 stocks advanced, outpacing 553 declines. Around 104 stocks were unchanged.
The rally was broad-based with all sectoral indices in the green. Metals led the charge as the Nifty Metal index jumped 4.5 percent, followed by pharma, auto, financials, realty and consumer durables – all gaining over 2 percent.
The sharp upmove in metal counters came amid easing concerns over a global tariff war following the US decision to pause additional duties on about 60 countries.
Among the top gainers in the Nifty pack were Hindalco Industries, Tata Steel, JSW Steel, Coal India, and Kotak Mahindra Bank.
Investor optimism was further boosted by expectations that India and the US may finalize a bilateral trade agreement (BTA) before the end of the 90-day tariff pause, set to expire on July 9.
A report by Moneycontrol suggested that New Delhi is eyeing a partial pact with Washington, focusing on three key areas—deepening trade ties, improving market access, and protecting domestic interests.
Despite weak global cues, domestic equities shrugged off concerns as analysts said India could benefit from the US' decision not to extend the tariff pause to China, Hong Kong, and Macau.
"While intra-day volatility may persist, higher US tariffs on China can improve export prospects for Indian companies. Also, any retaliation by China could push foreign institutional investors (FIIs) to favour Indian markets," said Vikas Jain, Head of Research, Reliance Securities.
The India VIX, a measure of market volatility, slipped 11 per cent to below 19, signalling reduced investor anxiety.
Broader markets also posted strong gains, with Nifty Midcap 100 and Smallcap 100 indices climbing between 2 and 2.5 percent.
However, analysts struck a cautious note. "There is no scope for a sustained rally in such an uncertain global environment. That said, India’s macroeconomic fundamentals remain strong and we are relatively insulated from the ongoing trade tensions," said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
On the technical front, the Nifty may face resistance in the 23,100–23,300 range, with support near 22,400, said Devarsh Vakil, Head of Prime Research at HDFC Securities.
In Asia, the picture remained mixed, with Japan’s Nikkei index leading losses, while Taiwan bucked the trend and outperformed.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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