Mumbai: Equity benchmark indices Sensex and Nifty ended higher in highly volatile trade on Tuesday, buoyed by heavy buying in bank and metal stocks, a firm trend in global markets and optimism over India-EU FTA.
However, muted corporate earnings growth and continued flight of foreign capital from Indian equities restricted the gains, traders said.
The 30-share BSE Sensex climbed 319.78 points, or 0.39 per cent, to settle at 81,857.48. During the day, it hit a high of 82,084.92 and a low of 81,088.59.
The 50-share NSE Nifty surged 126.75 points or 0.51 per cent to end at 25,175.40.
“India’s FTA with the EU, which accounts for 25 per cent of global GDP and 33 per cent of global trade, is a major breakthrough, particularly in the context of the prolonged India-US trade deal.
“Indian equities continued to trade with a measured and cautious undertone. The finalisation of the India-European Union bilateral trade agreement lent some support to investor sentiment amid a broader risk-off environment triggered by US tariff measures.
“However, sustained selling by foreign portfolio investors and muted third-quarter corporate earnings growth capped any meaningful upside in domestic equities,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.
From the 30-Sensex firms, Adani Ports, Axis Bank, Tata Steel, Tech Mahindra, NTPC, State Bank of India, UltraTech Cement and Bharat Electronics were among the biggest gainers.
Axis Bank jumped over 4 per cent after the firm reported a 4 per cent growth in its December quarter net profit to Rs 7,010.65 crore against Rs 6,742.99 crore in the year-ago period.
In contrast, Mahindra & Mahindra, Kotak Mahindra Bank, Asian Paints, Eternal and ITC were among the laggards.
India and Europe on Tuesday announced the sealing of an ambitious free trade agreement — billed as “mother of all deals” — that came against the backdrop of a fractious global environment and trade disruptions largely caused by Washington’s policy on tariffs.
Today, India has concluded the biggest free trade agreement (FTA) in its history with the European Union, Prime Minister Narendra Modi said after holding summit talks with the 27-nation bloc’s top leaders, Ursula von der Leyen and Antonio Costa.
“It is important to understand that India has a trade surplus of USD 45 billion with the US but only USD 25 billion with the EU. Therefore, even while celebrating this India-EU deal, we should tirelessly pursue the US-India deal, which India badly needs. Also, this India-EU deal will become operational only in early 2027,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Foreign institutional investors offloaded equities worth Rs 4,113.38 crore on Friday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 4,102.56 crore, according to exchange data.
Equity markets were closed on Monday for Republic Day.
In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index ended higher.
Markets in Europe were trading on a mixed note.
US markets ended higher on Monday.
Among sectoral indices, metal jumped 3.11 per cent, services (1.96 per cent), commodities (1.87 per cent), PSU Bank (1.76 per cent), Private Banks index (1.08 per cent), utilities (0.93 per cent) and oil & gas (0.92 per cent).
Consumer Durables declined 1.18 per cent, consumer discretionary (0.68 per cent) and FMCG (0.48 per cent).
The rupee rebounded from its all-time low levels and gained 19 paise to close at 91.71 (provisional) against the US dollar on Tuesday.
” the rupee strengthened…buoyed by a softer dollar and the landmark India-EU FTA. Gains were tempered by month-end dollar demand and limited inflows, as traders await the February 1 Union Budget,” said Nandish Shah – Deputy Vice President, HDFC Securities.
Brent crude, the global oil benchmark, dipped 0.15 per cent to USD 65.49 per barrel.
On Friday, the Sensex tumbled 769.67 points or 0.94 per cent to close at 81,537.70. The Nifty dived 241.25 points or 0.95 per cent to settle at 25,048.65.
“The India-EU FTA is structurally positive for India’s trade and investment outlook. It will boost exports, attract FDI, and diversify markets, but requires domestic industry adaptation to withstand intensified import competition,” Ravi Singh, Chief Research Officer from Master Capital Services Ltd, said.
