Stock markets make their highest monthly increase
The Indian benchmark indices, the Sensex and Nifty, experienced a 0.6% rise on Wednesday, marking their best single-day gain in a month. This upward trend was primarily driven by optimism surrounding new US trade deals with Japan, Indonesia, and the Philippines, which boosted investor sentiment in the region.
The Sensex BSE Sensex climbed 539.83 points, or 0.66%, to close at 82,726.64, while the Nifty gained 159 points, or 0.63%, ending the day above the 25,200 mark at 25,219.90. The BSE Midcap index edged up 0.24%, and the BSE Smallcap index remained relatively stable, rising by just 0.05%.
In comparison, other Asian markets showed mixed performances on the same day. Singapore’s Straits Times Index rose modestly by about 0.23-0.25%, Thailand’s SET indices experienced stronger gains, around 2.3-2.5%, and Vietnam’s HNX index increased by 0.6%, while the Ho Chi Minh Stock Index saw a smaller rise of about 0.18%.
The overall positive momentum in Asia was somewhat tempered by the Asian Development Bank’s lowered growth forecasts for the region due to expected challenges from ongoing US high-tariff policies, which could slow GDP growth across developing Asian countries including India and China.
Investor sentiment was buoyed by the announcement of a trade deal between the US and Japan, which includes the creation of a $550 billion fund to support investments in the United States. However, Arun Kejriwal, Founder of Kejriwal Research and Investment Services, noted that the US-Japan trade agreement has been deferred until the end of August.
Domestic institutional investors (DIIs) were net buyers, purchasing equities worth ₹4,358.52 crore on Wednesday, while foreign portfolio investors (FPIs) were net sellers, offloading shares worth ₹4,209 crore.
Tata Motors, Bharti Airtel, Bajaj Finance, Maruti Suzuki, and Bajaj Finserv were the top gainers on the Sensex, climbing up to 2.51%.
Siddarth Bhamre, Head of Research at Asit C. Mehta, stated that the markets are still consolidating and will remain so until the benchmarks touch a new high. Meanwhile, gold prices in India topped Rs 1 lakh today, rising Rs 2.5 lakh per kilo in just five days.
Overall, the 0.6% rise in Indian indices was driven by trade deal optimism, while other Asian markets showed varying degrees of gains, with Thailand seeing the strongest rise and Singapore and Vietnam posting more moderate increases. The markets are expected to continue their consolidation phase until significant new developments occur.
- The surge in the Indian indices is attributed to optimism surrounding new US trade deals, such as the one with Japan, which is expected to create a $550 billion fund for investments in the United States.
- Investors in the region were optimistic on Wednesday because of the positive impact of US trade deals with Japan, Indonesia, and the Philippines on the Indian benchmark indices, Sensex and Nifty.
- In the context of the Indian market, foreign portfolio investors (FPIs) were net sellers, while domestic institutional investors (DIIs) were net buyers, demonstrating the ongoing process of investing and trading in the economy.
- The overall positive sentiment in the Asian market was influenced by the trade deal between the US and Japan, even though its implementation has been deferred until the end of August.
- The performance of various Asian markets, as exemplified by the gains in Thailand’s SET indices and the relative stability of Singapore’s Straits Times Index, showed varying degrees of gains, with Thailand experiencing the strongest rise. In contrast, the Ho Chi Minh Stock Index saw a smaller rise, while Vietnam’s HNX index increased by 0.6%.
