Sensex settles 500 pts higher, Nifty ends near 25,350: India-EU trade deal among key factors behind market rise

Total income grew to Rs 900.51 crore in the October-December period.

The equity benchmark indices Sensex and Nifty settled higher on Wednesday, extending the previous session’s rally, tracking optimism over the India-European Union free trade agreement and firm global cues.

The Sensex jumped 487.20 points or 0.6 percent to settle at 82,344.68. During the day, it soared 646.49 points or 0.78 percent to 82,503.97. The Nifty surged 167.35 points or 0.66 percent to close the session at 25,342.75.

Energy, metal and realty stocks were among the top gainers. The midcap and smallcap indices also posted solid gains, signalling improving market breadth and renewed risk appetite.

Oil & Natural Gas Corporation, Coal India and Axis Bank were among the top gainers in the Nifty50 pack, rising up to 6 percent, while Asian Paints and Tata Consumer Products were among the major laggards, declining up to 6 percent.

Key factors behind market rise

1) India-EU trade deal: Investor sentiment was boosted after India and the European Union sealed a free trade agreement, described as the “mother of all deals”. The agreement aims to create a market of nearly two billion people. Under the pact, tariffs on 99 percent of Indian exports to the EU will be reduced, while duties on over 97 percent of EU exports to India will be cut. The deal is expected to account for almost a quarter of global GDP.

Ajit Mishra – SVP, Research, Religare Broking Ltd, said "Apart from the continued rub-off from the India–EU FTA, positive global cues, including a weaker U.S. dollar and supportive moves in global indices, helped bolster sentiment. Short-covering and renewed buying interest across sectors added to the positive momentum, while company-specific triggers, including notable gains in select heavyweight stocks, supported the upside."

India-EU FTA to boost textiles, gems exports with tariff concessions on 99% of shipments

2) Firm global cues: In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index were trading higher. US markets ended mostly higher on Tuesday.

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3) Decline in India VIX: The volatility index, or fear gauge, India VIX, declined more than 2 percent to 14.13. A lower VIX indicates easing market volatility and rising investor confidence.

Technical outlook

Mishra, added that the Nifty index has settled at a crucial juncture around the 25,350 level, and a decisive breakout could help extend the rebound towards the 25,600 zone. On the downside, the long-term moving average, the 200 DEMA around 25,150, remains critical to hold; a breakdown below this level could see the corrective phase resume.

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