Sensex, Nifty 50 Hit 3-Month High On India-US Trade Deal Optimism, Barring PSU Banks, All Sectors Gain

Domestic benchmark indices jumped to a three-month high on October 16 as investor sentiment improved on hopes of a potential trade deal between India and the United States (US). A strengthening Indian rupee also added to the positive sentiment.

Earlier, on October 15, US President Donald Trump, while speaking to reporters at a White House event, said that Prime Minister Narendra Modi had agreed to stop buying oil from Russia. The Ministry of External Affairs also confirmed earlier today that discussions were underway with the US to strengthen energy cooperation.

India’s continued oil imports from Russia have been a key point of friction with Washington; however, Trump’s comments suggested progress in the potential India-US trade deal.

At close, the BSE Sensex was up 862.23 points, or 1.04 per cent, at 83,467.66. Likewise, the NSE Nifty 50 was up by 261.75 points, or 1.03 per cent, at 25,585.30.

As of the time of filing this report, the Indian rupee traded around 87.82 against the US dollar. On October 15, the domestic currency had logged its biggest one-day gain in four months, rising by more than a per cent.

The strength in the rupee came on the back of the Reserve Bank of India’s (RBI) US dollar sales and improved market sentiment following signs of easing trade tensions between India and the US.

Improved operating performance from leading private banks, along with upbeat expectations from upcoming results of HDFC Bank and ICICI Bank, further bolstered sentiment, said Ajit Mishra, senior vice president, research, Religare Broking.

Small, Mid-Caps Underperform

Today’s session was broadly a large cap’s show. Relatively, broader market indices, though ended the day in green, underperformed the benchmarks. Nifty Midcap 100 gained 0.46 per cent, Nifty Smallcap 100 advanced0.24 per cent.

The Nifty 500, representing more than 92 per cent of the free-float market capitalisation of all the National Stock Exchange (NSE)-listed stocks, rose 0.80 per cent. The Nifty Microcap 250, which tracks the 250 most valuable and liquid stocks beyond Nifty 500 constituents, also gained 0.51 per cent.

All Sectors End In Green, Barring PSU Bank

Barring PSU Banks, all sectoral indices closed in green. Leading the gains, Nifty FMCG jumped 2.02 per cent, followed by Nifty Realty, which advanced 1.90 per cent. Nifty Consumer Durables, Nifty Private Bank, Nifty Auto, Nifty Financial Services and Nifty Bank gained between 1 per cent and 1.50 per cent.

Other sectoral indices such as Nifty IT, Nifty Metal, Nifty Energy, Nifty Oil & Gas, Nifty Pharma, and Nifty Healthcare, also ended the session in green. Nifty PSU Bank, on the other hand closed 0.44 per cent lower.

Nifty 50: Top Gainers & Losers

Nestle India gained 4.76 per cent after posting its Q2 results, followed by Tata Consumer Products, which gained 3.10 per cent. Titan, Axis bank, Kotak Mahindra Bank, and Hindalco gained between 1 per cent and 1.50 per cent. Mahindra & Mahindra, Adani Ports, Reliance Industries, Max Healthcare, and Bajaj Auto were also among the top gainers.

Only five Nifty 50 constituents closed in red. 44 stocks closed higher, while State bank of India ended the session flat.

On the losing side were Eternal (formerly Zomato), which fell 3.91 per cent after reporting its Q2 results. HDFC Life fell 2.38 per cent, Shriram Finance slipped 0.54 per cent, Infosys slipped 0.24 per cent, and Jio Financial Services fell 0.18 per cent.

Market Outlook

Signs of earnings growth from ongoing corporate results will be a key cue to watch in the next trade. Infosys posted its Q2 results post-market hours today, and Jio Financial Services is expected to report its Q2 results later in the day. Similarly, many other companies will report their quarterly earnings on October 17, on which market participants will be reacting.