Indian equities closed Wednesday’s trade higher, supported by gains in large banking heavyweights and a rebound in Reliance Industries after a four-day slump, which helped the front-line indices to end the session with gains of over 0.50%.
After witnessing lackluster activity earlier, the Nifty rose 0.7% to 25,230 points, while the S&P BSE Sensex surged 0.72% to 82,777 points. However, broader markets remained mixed, as weakness in the small-cap segment persisted. The Nifty Smallcap 100 index closed flat, while the Nifty Midcap 100 index managed to end the session with a 0.3% gain.
Global sentiment improved after President Trump announced a “massive” trade deal with Japan, stating the U.S. would impose 15% reciprocal tariffs, lower than the previously threatened 25%, while Japan would open its markets to more U.S. goods.
The agreement follows similar deals with the Philippines and Indonesia, lifting hopes for further agreements before the August 1 deadline. However, the prospects of an interim trade deal between India and the U.S. have dimmed, with talks deadlocked over tariff cuts on key agricultural and dairy products, according to Reuters, citing two Indian government sources.
While the potential trade deal with the US has been extending, India and the UK are set to sign a free trade agreement on Thursday during Prime Minister Narendra Modi’s UK visit, which is expected to boost bilateral trade.
Meanwhile, overseas investors continue to pull funds from Indian exchanges. So far in July, they have sold Indian stocks worth ₹22,185 crore, although they remain invested in the primary markets—an indication that they view valuations in the secondary market as stretched.
However, the sell-off has had little impact on the Indian stock market, as sustained buying by domestic institutional investors, particularly mutual funds, has cushioned the impact of FPI outflows and helped the market stay afloat.
The June quarter earnings season has remained subdued so far, indicating pressure on toplines due to weak demand, even as softer input costs and tighter cost controls supported bottom-line performance.
