Indices rise for the sixth day in a row on optimism about the US trade deal

Mumbai: Indian stock indexes ended higher for a sixth straight session on Thursday after giving up most of the nearly 1% gain earlier in the day, fueled by optimism around reports that India is negotiating with the US to cut tariffs from 50% to 15-16%. While information technology (IT) stocks led the upward movement on expectations of a trade deal and relaxation in visa rules for the first half of the year, the decline in Reliance Industries shares put a damper on the upward movement.

The NSE Nifty ended at 25,891, up 0.1% or 22 points. The BSE Sensex ended at 84,556, up 0.2% or 130 points. Both indices are almost 1.5% away from their record levels at the end of September last year.

“Markets recovered on positive sentiment on reports that India and US were close to finalizing trade deal and correction in precious metals,” said Rajesh Palviya, Head of Technical and Derivatives, Axis Securities.

Elsewhere in Asia, markets were mixed. Japan fell 1.4%, while South Korea and Taiwan fell 1% and 0.4% respectively. Indonesia climbed 1.5% and Hong Kong rose 0.8%. China ended 0.2% higher.

Domestically, the Nifty IT index rose 2.2%, while the Nifty Private Bank index rose 0.5%. The Nifty Oil & Gas index fell 0.6% lower, and the Auto index ended marginally lower.

“All export-based sectors with high US exposure witnessed a short squeeze on Thursday after good momentum over the past few sessions,” said Sunny Agrawal, Head of Fundamental Equity Research, SBI Securities. Agrawal expects the Nifty to overcome a hurdle at the 26,300 levels. The index’s current all-time high is 26,216.05. The Nifty Midcap 150 and Smallcap 250 indices fell 0.2% each. Of the 4,389 shares traded on BSE, 1,809 advanced while 2,464 declined. Over the past week, the mid-cap and small-cap indices rose 0.2% and 0.8% respectively.

Palviya said once the benchmark hits a new high, the broader market is expected to join the rally.

Foreign portfolio investors (FPIs) sold shares worth a net ₹1,165.9 crore on Thursday. Their domestic counterparts bought shares worth ₹3,893.7 crore crore. In October, global investors bought shares worth ₹969.8 crore.

“Foreign investors are buying gradually, but the buying is in selective pockets as they are in no hurry to cover and rotate short positions until there is a concrete outcome from the trade deal,” Palviya said. “Nifty is trading a few hundred points lower than its all-time high, but the setup indicates that call writers are already in place ahead of October expiry. The index is expected to take a brief pause and then resume an upward trajectory to cross record highs in November.”