MUMBAI: Indian stock markets continued their upward momentum on Wednesday, with both key indices, the Nifty 50 and the BSE Sensex, posting early gains.
This positive movement came as investor confidence received a major boost following the recent trade agreement between the United States and Japan.
The Nifty 50 index opened at 25,138.50, registering a gain of 77.60 points or 0.31 per cent. Similarly, the BSE Sensex began the day on a stronger note at 82,429.66, rising by 242.85 points or 0.30 per cent.
Experts attributed the bullish sentiment to the recent US-Japan deal, which settled tariffs at 15 per cent on Japanese goods, instead of the previously feared 25 per cent. This has lifted investor morale across Asian markets.
Ajay Bagga, Banking and Market Expert, said, “Indian markets have held key support levels despite the twin headwinds of tariff uncertainty and weak earnings. The Japan deal raises hopes for a US-India deal in the ballpark 15 per cent range. That could be a huge catalyst for short covering and could lead to a regaining of the September 2024 all-time highs in the Indian markets. Today is promising to be a positive day, with massive inflows from DIIs countering the continued FPI outflows.”
The US-Japan deal is expected to lead to a short squeeze in Japan, with Japanese automaker stocks reportedly rising as much as 15 per cent in early Tokyo trade.
The market now anticipates that similar deals may be announced with other major economies such as the EU and India, providing further support to global equity markets.
Despite the positive open, technical analysts remained cautious. Akshay Chinchalkar, Head of Research at Axis Securities, noted, “The Nifty ended down 30 points to close at 25,061. Technically speaking, the market did break above the first hurdle at 25,144 yesterday but wasn’t able to close above it, and that’s not a good sign. To reiterate, unless we break 25,340 on a closing basis, bulls have very little going for them from these levels. Asian cues are positive due to Japan securing a trade deal with the US.”
In the broader market, indices on the NSE showed mixed trends. The Nifty 100 was up by 0.15 per cent, while the Nifty 200 gained 0.10 per cent. However, the Nifty Midcap index fell by 0.14 per cent, and the Nifty Smallcap 100 declined by 0.33 per cent.
Sector wise performance was also mixed. The Nifty Auto index surged by 1 per cent, supported by gains in Japanese automobile stocks. Nifty Metal gained 0.36 per cent, while Nifty PSU Bank posted a 0.16 per cent increase. On the downside, the Nifty FMCG, IT, and Media indices registered losses.
Commenting on the technical outlook, Vikram Kasat, Head, Advisory, PL Capital said, “The tug of war between the bulls and the bears continues.
Nifty is failing to cross and sustain above the 40HEMA, which has now moved lower to 25,104. Sustaining above the 40HEMA and closing above the high hourly high of 25,182 can hint towards a trend reversal as it would reinforce a higher top, higher bottom formation. The low of 24,882 will be an important support level.”
As the markets digest the implications of the US-Japan deal, all eyes are now on potential trade developments involving India, which could serve as a further trigger for the next leg of the market rally. (ANI)
