By Anjana Therese Antony
Stock market indices made a smart comeback on Monday after Sergio Gor, the newly appointed US ambassador to New Delhi, said the US and India are actively engaging in trade discussions and that both countries are scheduled to discuss further on the matter on Tuesday.
Benchmark indices, Nifty 50 and Sensex, which had fallen almost a percentage during the day, recovered and closed almost 0.4% higher each at 25,790.25 points and 83,878.17 points, respectively. However, the broader market continued to be in the red. The BSE Mid-cap index fell 0.4% while the BSE Small-cap index was down 0.68%.
What do market participants say?
Market participants believe that though there may not be any quick resolution to trade talks, the assurance that things are moving in the right direction came as a significant relief.
Said Pankaj Pandey, head of research at ICICI Securities, “I don’t think the market is very hopeful that the deal will happen very soon, but as long as things are moving in the right direction, it is fine.”
Echoing similar views, Dhananjay Sinha, co-head of institutional equities at Systematix group, added, “There will definitely be a certain settlement that will happen but it appears that it will be a lingering thing…It is going to be a prolonged case of negotiation.”
He also expressed his worries that earnings growth is not expected to be great despite the reduction in GST and interest rates.
With the December quarter earnings season kick starting on Monday, investors will closely look for management commentary on demand, business outlook, and strategies, among others.
Aggregate earnings growth
The aggregate earnings growth of Nifty 50 companies for December quarter is expected to be in around mid- single digits on year, according to various brokerage reports. However, the ease in valuations is a relief, with the Nifty 50’s forward now trading at more than 18x the price-to-earnings ratio of FY28 and 21 times the FY27 PE.
However, foreign portfolio investors (FPIs) continued their selling spree. FPIs net sold equities worth more than Rs 3,638 crores on Monday while domestic institutional investors continued to support the market by net buying shares worth more than Rs 5,839 crores, according to provisional data from BSE. In 2025, FPIs net offloaded over Rs 1.65 lakh crores of shares, which is almost 24 times what they sold a year ago.
Tata Steel, Asian Paints and Trent rose over 2% and were top gainers in today’s trade. Among sectoral indices, the BSE Metal (1.92%) and BSE Commodities (1.06%) were top gainers.