Dalal Street surged to the day's high in the last hour of trade on Wednesday, July 23, as optimism from the U.S.-Japan trade deal lifted the benchmark indices. Further, domestic investors drew support from India and U.K.'s free-trade agreement, which is slated to be signed tomorrow.
As part of the agreement, India will ease tariffs on British whisky, cars, and certain food items, while the UK will offer duty-free access to Indian textiles and electric vehicles.
At close, the Sensex was up 539.83 points or 0.66 percent at 82,726.64, and the Nifty was up 159.00 points or 0.63 percent at 25,219.90. About 1737 shares advanced, 1821 shares declined, and 116 shares were unchanged.
The broader markets also took a U-turn, rising to trade in the green after paring all early losses. India VIX, the measure of fear and volatility in the markets, continued to fall, sinking two percent to 10.53.
"Continued advancements in global trade negotiations are expected to alleviate near-term trade tensions and foster greater market stability. While elevated valuations remain a concern, the prevailing market strength indicates potential for near-term earnings recovery. However, the pace and sustainability of this recovery will be critical in shaping the market’s forward trajectory," said Vinod Nair, Head of Research, Geojit Investments.
Auto, banking and financial, and IT stocks were among the top sectoral gainers. The US-Japan deal, which reduces tariffs on Japanese vehicles entering the US market, lifted the Nifty Auto index. Indian automakers mirrored the global momentum, with Bajaj Auto, Tata Motors, Maruti Suzuki, Mahindra & Mahindra, and Hyundai Motor India gaining up to 3 percent intraday.
The rally was part of a broader trend that saw Japanese auto giants like Toyota, Honda, and Nissan surge on the Tokyo Stock Exchange, pushing the benchmark Nikkei index up by 2 percent.
On the flip side, the realty index crashed 2.5 percent. Shares of real estate majors Lodha Developers and Oberoi Realty saw a large trade of stake worth Rs 3,400 crore in early session, reportedly by global investor Invesco, weighing down the realty index.
Going ahead, the markets are likely to continue directionless trade, amid FII selling and the ongoing earnings season.
"The Nifty 50 index would have the near-term resistance at the 25,250 zone, which needs to be breached decisively to further improve the bias and thereafter, to retest the 25,650 level to strengthen the trend once again. The 24,900 zone shall remain as the major and crucial support for the index, which needs to be sustained as of now," said Vaishali Parekh, Vice President - Technical Research, PL Capital.
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