Nifty logs best week in a month, gains 4.2% on ceasefire, US hopes

Despite a Friday dip, Nifty posted its best weekly gain since April 18, driven by progress on trade deals, easing geopolitical concerns, and expectations of RBI rate cuts

India’s benchmark Nifty ended the week with a 4.2 per cent rise, marking its best weekly run since April 18, as investors cheered a truce with Pakistan, trade talks with the United States (US), and expectations of domestic interest rate cuts.

 

The Nifty ended at 25,020, down 42 points or 0.17 per cent, while Sensex ended Friday’s session at 82,331, down 200 points or 0.24 per cent, paring its weekly gain to 3.6 per cent.

 

The week began with the Sensex and Nifty posting their largest single-day gains in over four years, following a ceasefire agreement between India and Pakistan.

 

 

Investors heaved a sigh of relief as the ceasefire eased concerns about the economic impact of a potential war breaking out between the two nuclear-armed neighbours.

 

However, profit booking during the week dragged the indices down, fuelled by concerns that foreign portfolio investors (FPIs) may redirect funds to China and the US following the trade tariff truce.

 

During the week, the US and China agreed to slash reciprocal trade tariffs for 90 days, with the US reducing duties on Chinese imports from 145 per cent to 30 per cent, while China trimmed its tariffs on US goods from 125 per cent to 10 per cent.

 

This China-US deal sparked fears that foreign portfolio investor flows could move away from India. In April, India emerged as a haven amid global trade uncertainties, attracting foreign investments. 

 

Markets rose again later in the week after US President Donald Trump said India had offered to drop tariffs on US goods on Thursday. Following the sharp rise, experts believe, markets could remain range-bound going ahead.

 

"The broader consolidation with a positive bias is likely to persist for the Indian markets, supported by easing geopolitical tensions, progress on trade agreements, and improving signs of macroeconomic stability," said Siddhartha Khemka, head of research for wealth management at Motilal Oswal Financial Services.

 

The market breadth was positive on Friday, as the broader markets outperformed. The Nifty Midcap 100 index rose about a per cent, while the Nifty Smallcap index rallied close to 2 per cent. About 2,542 stocks advanced and 1,449 declined on the BSE.

 

Bharti Airtel, which fell 2.8 per cent, was both the worst-performing Sensex stock and the biggest drag on the Sensex. The stock declined a day after over $1 billion stake sale by large shareholder Singapore Telecommunications.

 

Domestic and foreign portfolio investors (FPIs) were the big buyers on Friday. FPIs were net buyers worth ₹8,831 crore, their biggest purchase since March 27, while domestic institutions were the net buyers worth ₹5,187 crore, their biggest since May 9.

 

The Airtel mega block deal influenced the FPI and DII investment tally.

 

"Sustained FPI inflows and stable global markets further contribute to the positive sentiment. We continue to maintain our bullish outlook and recommend focusing on selective stock-picking," said Ajit Mishra, SVP - Research of Religare Broking.