Markets pricing in trade deal positives; buy the dips and hold: Analysts

UR Bhat, co-founder & director, Alphaniti Fintech says the trade deals have cleared the air as regards the EU and the US stance, and expects the market to react to finer details of the India-US deal.

The markets have gained ground, albeit intermittent corrections, in the last fortnight buoyed by the developments regarding the free trade agreement (FTA) between India and the European Union (EU), and developments regarding the trade deal between India and the United States (US).  The Sensex and the Nifty 50 have moved over 5 per cent higher each from February 1 lows at 79,899 and 24,572, respectively, despite the sharp fall seen on the budget 2026 day as the government hiked the securities transaction tax (STT) on futures and options (F&O) trades.  On Monday, the Sensex and the Nifty gained 0.5 per cent and 0.6 per cent at 84,000 and 25,840 levels.  READ STOCK MARKET UPDATES TODAY LIVE  At the current levels, the markets, analysts believe are pricing in most positives of the recent developments and suggest investors stay put for now and use any market correction to accumulate stocks from a long-term perspective.  For now, the worst seems to be over for the markets, said G Chokkalingam, founder and head of research at Equinomics Research, from a short-to-medium term perspective.  “EU and the US account for a significant portion of India’s exports. To that extent, the deals are important even from a stock market viewpoint. The rupee, too, is expected to stabilise and the foreign investors are likely to make a gradual come back. Investors can accumulate small-and mid-cap stocks from a short-to-medium term perspective,” he suggests.  UR Bhat, co-founder & director, Alphaniti Fintech, however, is a bit cautious. Though he agrees that the trade deals have cleared the air as regards the stance of EU and the US as regards imports from India to these two destinations, he expects the markets to react to finer details of the India – US trade deal once they are made clear.  “The markets are likely to react to the trade deal fine print. As things stand, the markets are fully pricing in the positives from the developments. It would be better if investors stay put for now and invest (in the large-caps) only if there is a 2 – 3 per cent correction in the Nifty from the current levels,” he said.  ALSO READ | India-US trade deal: Brokerages decode key risks, market implications  In terms of sectors, Nifty Energy, Realty and Consumer Durables have been the top performing sectors during this period with a rise of around 7 - 10 per cent. On the other hand, Nifty IT has been the only laggard with a fall of nearly 7 per cent, ACE Equity data shows. 

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  The Nifty is seen testing the 25,800 hurdle, and a close above the same can trigger a rally towards 26,100 levels, suggests Nandish Shah, senior derivative and technical analyst at HDFC Securities. “In case of a dip, the Nifty is likely to find strong support around 25,500-25,550 levels,” Shah said.  The Nifty, according to Ponmudi R, CEO of Enrich Money, is currently trading above all its major moving averages (20-, 50-, 100- and 200-day EMAs), reflecting a constructive technical setup.  ALSO READ | From Bernstein to Nomura: Brokerages give thumbs up to India-US trade deal  Sustaining above 25,700 levels for the Nifty, he said, will keep the broader structure positive, while any early dip below 25,650 could invite caution and trigger mild profit-booking or consolidation.  “Key support is placed in the 25,500–25,600 zone, where the 50- and 100-day EMAs converge. On the upside, 26,000 remains a strong psychological resistance, and a sustained breakout above this level could open the path toward fresh all-time highs. Momentum indicators are supportive, with the relative strength indicator (RSI) around 55 pointing to improving upside momentum and MACD gradually turning positive. The bias remains positive with a range-bound to upward tilt as long as 25,550–25,600 is defended,” he said.