Indian stocks continue to rise on US deal hopes, GST reforms; Urban Company soars on listing

NEW DELHI: Indian stock benchmarks witnessed yet another day of gains, supported by a host of factors that include the recent GST reforms, intensification of efforts for the India-US trade deal, and moderate inflation, among others.

The Sensex closed the Wednesday session at 82,693.71 points, up 313.02 points, or 0.38 per cent, while Nifty settled at 25,330.25 points, up 91.15 points or 0.36 per cent. Among the sectoral indices, auto, FMCG, PSU bank, oil and gas, rose the most, while metal and consumer durables declined the most, NSE data showed.

“Indian equities maintained their upward momentum, aided by the revival of India-US trade talks and efforts to strengthen bilateral ties”, said Vinod Nair, Head of Research, Geojit Investments Limited. “Strong domestic inflows, currency stability, and favourable geopolitical dynamics continue to create a constructive near-term outlook for the market”, he added.

The fact which stole the show today was the market debut of Urban Company, a platform for on-demand home services. The company made a 64 per cent jump from its issue price to close the day at Rs 169 per share. Compared with the opening price, it rose Rs 4.2 per cent.

“Strong listing was above our expectations; despite listing pop, Urban Company presents a compelling long-term structural story and can serve as a proxy for the growing demand in the home services segment across its key geographies”, noted Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

In spite of being perceived as expensive IPO from a valuation standpoint, the offer witnessed strong investor demand which was primarily led by Qualified Institutional Buyers (QIBs) 147x and Non-Institutional Investors (NIIs) 77x, with retail participation also remaining healthy 41x compared to other recent offerings.

“…we continue to recommend allotted investors who can take near-term risk to hold the stock from a long-term investment perspective, keeping in mind the inherent market risks. For non-allotted investors, a ‘Wait and Watch’ approach is advisable to assess any post-listing dip as a potential entry point”, Tapse noted.

The broader stock markets today traded robustly on hopes of a possible US Federal Reserve rate cut in the impending monetary policy review meeting. Investors also took comfort from the first phone call between US President Donald Trump and Prime Minister Narendra Modi since June, which signalled improving relations.

Trump extended 75th birthday wishes to PM Modi through a phone call, and expressed gratitude for support on ending the conflict between Russia and Ukraine. In a post on his social media account, Truth Social, Trump stated that PM Modi is doing a “tremendous job.”

A team of United States officials led by Assistant US Trade Representative for South and Central Asia, Brendan Lynch, had “positive and forward-looking” discussions on Tuesday with the officials from India’s Department of Commerce, and it was decided to intensify efforts to achieve early conclusion of a mutually beneficial Trade Agreement.

“Encouraging signals from India-US trade talks rekindled buying interest across sectors. The focus of market participants will now shift squarely to the US Federal Reserve’s policy outcome and outlook later tonight, with markets widely pricing in a 25-basis point rate cut”, Sudeep Shah, Head-Technical Research and Derivatives at SBI Securities, said. (ANI)