Sensex, Nifty surge in early trade on hopes of India-US trade deal, FII buying

Mumbai: Equity benchmark indices Sensex and Nifty surged in early trade on Friday amid optimism surrounding a potential India-US trade deal, record high GST collection in April, and continuous foreign fund inflows.

Moreover, a firm trend in global markets also added to the optimism in equities.

The 30-share BSE benchmark gauge jumped 500.81 points to 80,743.05 in early trade. The NSE Nifty surged 110.65 points to 24,444.85.

Later, the Sensex quoted 816.41 points up at 81,064.47, and the Nifty climbed 222.30 points to 24,556.50.

From the Sensex firms, Adani Ports jumped nearly 5 per cent after the firm reported a 50 per cent jump in its March quarter net profit and issued a higher year-on-year revenue growth forecast for the current fiscal, citing strong growth in port volumes and a robust rise in the logistics business.

Maruti, IndusInd Bank, Axis Bank, ICICI Bank, Eternal and Mahindra & Mahindra were also among the gainers.

Nestle, Titan, Bajaj Finserv and Hindustan Unilever were the laggards.

The surprising resilience of the market has been primarily driven by the sustained FII buying for eleven trading days in a row taking the cumulative FII buying for this period to Rs 37,375 crore, VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

"FII buying has been driven by weakness in the dollar and declining growth prospects in the US. Other macros like declining interest rates in India, decline in crude prices, and green shoots of pickup in demand are positives for the market. The high probability of India among the five ‘allies’ of the US entering into early trade deals with the US is also a significant positive factor," he added.

Goods and Services Tax (GST) collection rose 12.6 per cent Y-o-Y to an all-time high of about Rs 2.37 lakh crore in April, which the government said shows the resilience of the Indian economy and the effectiveness of cooperative federalism.

"Domestically, the market sentiment remains upbeat due to continued FII buying, strong quarterly earnings, record high GST collection during the month of April, and a drop in oil prices to a three-month low of USD 61 per barrel," Vikas Jain, Head of Research at Reliance Securities, said.

In Asian markets, South Korea's Kospi index, Tokyo's Nikkei 225 and Hong Kong's Hang Seng were trading in the positive territory while Shanghai SSE Composite index quoted marginally lower.

US markets ended in the positive zone on Thursday.

"Positive triggers include record GST collections (Rs 2.37 lakh crore), renewed FII interest in India, and upbeat cues from global markets like the Dow’s 8-day rally," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

Optimism returned Friday morning as Asian markets and US futures rose after China signaled willingness for tariff talks, he added.

Global oil benchmark Brent crude climbed 0.69 per cent to USD 62.56 a barrel.

Foreign Institutional Investors (FIIs) bought equities worth Rs 50.57 crore on Wednesday, according to exchange data.

Equity markets were closed on Thursday for 'Maharashtra Day'.

The 30-share BSE benchmark gauge declined 46.14 points or 0.06 per cent to settle at 80,242.24 on Wednesday. The Nifty ended marginally lower by 1.75 points or 0.01 per cent at 24,334.20.