Sensex settles 500 pts higher, Nifty above 25,200: US-Japan trade deal among key factors behind market rise

Sensex, Nifty rise amid strong buying by investors.

The equity benchmark indices rallied on Wednesday, tracking positive global cues after the US and Japan announced a trade agreement. Firm trends in Asian markets and optimism over corporate earnings also lifted investor sentiment.

Sensex jumped 539.83 points or 0.66 percent to settle at 82,726.64. During the day, it surged 599.62 points or 0.72 percent to 82,786.43. The Nifty gained 159 points or 0.63 percent to settle at 25,219.90.

Tata Motors, Bajaj Finance, Maruti Suzuki India, Shriram Finance and Apollo Hospitals Enterprise were among the major gainers, rising up to 2 percent.

Key factors behind the market rally:

1) US-Japan Trade Deal: Investor sentiment improved across Asian markets following the announcement of a trade agreement between the United States and Japan. The deal, which includes a 15 percent tariff on imports from Japan, was confirmed by US President Donald Trump.

2) Positive Global Cues: Major Asian indices including South Korea’s Kospi, Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng traded in the green during the session.

"Asian cues are positive due to Japan securing a trade deal with the US," said Akshay Chinchalkar, Head of Research, Axis Securities.

US markets ended mostly higher on Tuesday. Futures on Wall Street were also trading in positive territory, pointing to a firm start for US equities.

"The 11th new record high for 2025 set by the S&P 500 yesterday is an indication of the direction and resilience of equity markets globally," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. "Markets are climbing all walls of worries, and valuation concerns have been put on the back burner. In the near-term, this resilience is likely to continue."

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3) Corporate Earnings Support: First quarter results have indicated steady performance, especially in the banking and digital segments.

"Q1 results of Eternal and Paytm indicate steady growth potential of the digital stocks which have a long runway of growth," added Vijayakumar.

4) Decline in Volatility Index: India VIX, the volatility index, declined nearly 2 percent to 10.54. A lower VIX typically reflects reduced market uncertainty, which tends to support equity buying.

Technical View

According to Anand James, Chief Market Strategist at Geojit Financial Services, Nifty continues to show potential for limited upside.

"While the 10-day SMA prompted a turn lower yesterday, the 50-day SMA stepped in to restrict downsides,” he said. “This keeps hopes alive for a renewed attempt at upsides today, potentially aiming for 25,215 or 25,400. The prospects of extended gains depend on how the descending broadening wedge pattern evolves."

He added that the 200-day SMA is positioned around the 24,000 level, with intermediate support at 24,800 and 24,450.

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