Markets rally as Nifty tops 26,000; metals, energy stocks lead gains

Sensex rises 369 points to 84,997; optimism over a potential US-China trade deal and strong global cues boost market sentiment

Benchmark indices gained on Wednesday, with the Nifty closing above the 26,000 mark for the first time after a year, buoyed by optimism over a potential US-China trade deal. The 50-share index ended the session at 26,054, up 118 points or 0.5 per cent. This is the first close above 26,000 since September 27, 2024.

 

The Sensex advanced 369 points, or 0.4 per cent, to 84,997. From Wednesday’s close, the Sensex is just 1 per cent and the Nifty 0.6 per cent shy of their all-time highs. The combined market capitalisation of BSE-listed companies rose by ₹3.2 trillion to ₹474 trillion, slightly below all-time high of ₹478 trillion on September 27, 2024.

 

Investor sentiment improved after reports of progress on a US-China deal ahead of President Donald Trump’s meeting with Chinese President Xi Jinping in South Korea on Thursday. The US and South Korea also finalised a trade pact at a summit in Seoul on Wednesday.

 

Metal and energy shares led the rally, with the Nifty Metal index rising 1.7 per cent and the Nifty Oil & Gas index climbing 2.1 per cent amid expectations that easing trade tensions would spur commodity demand.

 

Adani Group stocks gained across the board, except one, after brokerages reiterated their bullish stance on Adani Energy Solutions, which surged 5.1 per cent. Adani Ports and Adani Entertainment — both part of the Nifty — gained more than 2 per cent each.

 

Equities have been on an upward trajectory this month, supported by strong quarterly updates and expectations of an India-US trade pact that could lower tariffs on Indian exports to 15-16 per cent from the current 50 per cent. Such an agreement could inject fresh momentum into the ongoing rally, though lingering uncertainty and stretched valuations continue to trigger profit-taking at higher levels.

 

“The domestic market ended on a strong note, supported by positive cues from Asian markets and improved clarity on global trade dynamics. Optimism over potential progress in India-US trade talks further lifted sentiment,” said Vinod Nair, Head of Research at Geojit Financial Services.

 

Going forward, investors will watch the progress of the India-US trade negotiations, the remainder of corporate earnings, and the direction of foreign portfolio investor (FPI) flows for cues on market trajectory.

 

FPIs were net sellers on Wednesday worth ₹2,540 crore, while domestic institutions bought shares worth ₹5,693 crore. Despite recent selling, FPIs have turned net buyers this month to the tune of ₹17,493 crore, according to NSDL data.

 

Market breadth remained robust, with 2,446 stocks advancing against 1,727 declining.

 

“With rotational buying across sectors, we expect the prevailing uptrend to continue, with the Nifty eyeing a new record high. Immediate support is placed at 25,800. While improving market breadth adds to the positive bias, we advise a selective approach favouring fundamentally strong companies,” said Ajit Mishra, SVP - Research, Religare Broking.