The market momentum suddenly gathered pace in afternoon trade with the Sensex and Nifty shooting up significantly from morning levels. The Sensex has jumped 1,300 points to over 82,600 levels and the Nifty is now cruising past the 25,000 levels for the first time since October, 2024.
Market expert, Deepak Jasani believes that there are two reasons that may have led to rise in market levels as well as volumes in afternoon trade, “US President Donald Trump’s comments in Doha indicating that India has proposed zero tariffs on all US goods listed sentiment that a trade deal with US is in the offing soon. That apart, given that the spike was seen in afternoon trade, one can also not rule out fresh buying by FII. Since it is the weekly expiry today, some unwinding of position may have also helped in boosting the sentiment.”
Apart from supportive global cues, some of the key reasons why the market is surging today includes-
Trump’s comment on zero tariff proposal by India lifts sentiment
US President Donald Trump during his Middle East visit, reportedly said that India has proposed zero tariff on all US goods. According to Bloomberg, Trump said that India has “offered us a deal where basically they are willing to literally charge us no tariff.”. He was speaking to business leaders at an event in Qatar.
Open Interest build-up seen at 25,000 levels
Initial data indicates significant Open Interest buildup around 25,000 and the 25,100 levels. Many market observers are of the opinion that this may indicate the broad trend and the levels that market participants perhaps are aiming towards.
FII buying continues
Another key reason why the sentiment across Indian markets is buoyant, is the continued FII buying. FIIs have net bought equities worth over Rs 50,000 crores since April 15. In fact, last week saw the highest FII inflow since July 2024. A string improvement in macro indicators like inflation cooling off, growth in manufacturing has led to expectations of more rate cuts bu the RBI. That apart the dollar has also remained stable against the rupee, significantly off the highs seen in January. This has improved the relative return prospects of the investments made in India.
Bank Of America says India emerges most favoured market in Asia
The positive sentiment got even more support after a recent survey by Bank Of America indicated that India emerged as the most favored market, perceived as a likely beneficiary of the supply chain re-alignments following the effects of tariffs. Japan relinquishes the top spot and China is now in the third spot from the lowest rank in the previous month. Thailand remains the least preferred market. Sector preferences.
Interestingly at the beginning of this Financial Express.com had spoken to experts on the possibility of the Nifty hitting 25,000 this week. The general consensus was that the softening of inflation levels will help boost sentiment in the market. In fact, Anand James, Chief Market Strategist at Geojit Investments explained earlier today that, “a symmetrical triangle pattern in daily chart tilts the trend in favour of upsides for the Nifty, aiming for 25,200, but momentum indicators do not favour a vertical rise right away.”