Benchmark indices rose up to 0.66% on Wednesday, marking their best single-day gain in a month, in line with other Asian equity markets. Investor sentiment was buoyed by the announcement of a trade deal between the US and Japan.
Market gains
The Sensex BSE Sensex climbed 539.83 points, or 0.66%, to close at 82,726.64, while the Nifty gained 159 points, or 0.63%, ending the day above the 25,200 mark at 25,219.90. Over the last 52 trading sessions, the markets have remained in a consolidation phase, with the indices fluctuating within a narrow range of ±2%.
Siddarth Bhamre, Head of Research at Asit C. Mehta, said the markets are still consolidating and will remain so until the benchmarks touch a new high. He added that the future direction of the market will depend on corporate earnings. “So far, earnings have not been very encouraging. While some companies have shown improvement in their bottom line, topline growth is still lacking,” he said.
Added Arun Kejriwal, Founder of Kejriwal Research and Investment Services, “Today’s rise cannot be seen as a breakout from the consolidation phase.”
He noted that corporate results have been underwhelming and that the US-Japan trade agreement has now been deferred until the end of August, contrary to earlier expectations. “A follow-up and sustained rally will require stronger supporting news,” he added.
FPI
Foreign portfolio investors (FPIs) were net sellers, offloading shares worth ₹4,209 crore, while domestic institutional investors (DIIs) were net buyers, purchasing equities worth ₹4,358.52 crore.
Japan’s equity index surged 3.51% after US President Donald Trump reached a trade agreement with Japan that includes a 15% tariff on imports—such as automobiles—from the key US ally. The deal also involves the creation of a $550 billion fund to support investments in the United States.
Following Japan’s lead, equity markets in Hong Kong, Taiwan, Thailand, Indonesia, and the Philippines also surged, gaining up to 2.34%.
However, broader indices remained relatively flat. The BSE Midcap index edged up 0.24%, and the BSE Smallcap index rose by just 0.05%. Market breadth was neutral, with 2,005 gainers versus 2,025 losers on the BSE. Overall investor wealth increased by ₹1.90 lakh crore.
On the sectoral front, telecom, auto, banking, and financial services were the top performers, rising up to 1.14%. On the other hand, realty, FMCG, and capital goods declined by up to 2.6%.
Tata Motors, Bharti Airtel, Bajaj Finance, Maruti Suzuki, and Bajaj Finserv were the top gainers on the Sensex, climbing up to 2.51%.