Indian markets spring back to life with best weekly gains since 2021

Sensex rose 2% on Thursday by renewed risk-on sentiment after trade talks progress

Indian equity benchmarks rose nearly 2 per cent on Thursday, capping a truncated trading week with their strongest weekly performance in over four years. The rally was sparked by renewed risk-on sentiment following progress in trade negotiations and expanded tariff exemptions. Private banking stocks led the advance as deposit rate cuts lifted margin expectations, while foreign portfolio investor (FPI) buying reinforced the uptrend.

 

The Sensex closed at 78,553, up 1,509 points, or 1.96 per cent, while the Nifty settled at 23,852, rising 415 points, or 1.7 per cent. Both indices climbed 4.5 per cent during the week — their best showing since February 5, 2021.

 

 

The total market capitalisation of BSE-listed firms rose by ₹4.6 trillion to ₹419.6 trillion.

 

Private lenders drove the Sensex’s advance, with recent deposit rate cuts signalling improved net interest margins. ICICI Bank (up 3.7 per cent) was the top contributor, followed by Reliance Industries (2.9 per cent) and HDFC Bank (1.5 per cent). Both HDFC Bank and ICICI Bank hit record highs during the session.

 

FPIs bought shares worth ₹4,668 crore on Thursday, while domestic institutions sold ₹2,006 crore. For the week, FPIs net purchased shares worth ₹14,670 crore, reversing their earlier selling streak triggered by US trade policy concerns and weak Indian corporate earnings. 

 

Analysts linked the shift to short-covering and global risk appetite following US tariff exemptions.

 

The rebound in domestic equities tracked a broader global rally after US President Donald Trump extended tariff waivers for nations involved in trade talks.

 

Investors are now watching for further progress in negotiations, which could stave off steep import taxes. Meanwhile, India’s ongoing earnings season is expected to drive stock-specific moves.

 

“A strong rally in largecap stocks was visible today, mainly led by financials, amid expectations of improved margins from changes in savings deposit interest rates. A reversal in foreign institutional investor flows also lifted sentiment, although the durability of this trend remains uncertain,” said Vinod Nair, head of research at Geojit Financial Services.

 

The market breadth was firm, with 2,396 stocks rising and 1,563 declining.

 

“With the Nifty now hovering around its previous swing high near 23,800, attention will shift to earnings announcements from heavyweights. We continue to favour a ‘buy-on-dips’ approach, with a focus on rate-sensitive sectors for long trades, while staying selective elsewhere,” said Ajit Mishra, senior vice-president of research at Religare Broking. Gold retreats after hitting record high

 

Gold paused its record-breaking rally amid optimism over US-Japan trade talks, after bullion earlier reached another all-time high.The precious metal edged lower to trade around $3,325 an ounce, after its biggest one-day gain in two years on Wednesday. It touched a record $3,357.78 earlier in the day, and is still on track for a weekly gain of  3 per cent. 

That jump came on dollar weakness and as Federal Reserve Chief Jerome Powell signaled a wait-and-see approach to tariffs, pushing back on hopes the central bank would act quickly to soothe investor fears.  The precious metal has climbed almost 27 per cent this year — matching the gain it notched in 2024 — as US President Donald Trump’s escalating trade war creates anxiety over a possible global recession.   Bloomberg