Indian Markets Open Higher Amid Trade Talks and Earnings Focus

Nifty50 and Sensex Climb as Investors Weigh Global and Domestic Factors

Indian equity markets commenced Tuesday’s trading session on a positive note, with both the Nifty50 and BSE Sensex registering gains. Investors are closely monitoring trade negotiations between India and the United States, alongside upcoming quarterly corporate results, for market direction.

Market Performance and Key Drivers

The Nifty50 index surpassed the 25,100 mark, while the BSE Sensex saw an increase of over 150 points in early trading. At 9:26 AM, Nifty50 was trading at 25,123.10, up 0.13%, and BSE Sensex stood at 82,352.59, up 0.19%. Market watchers anticipate a period of sideways movement, with a keen eye on corporate earnings and the progress of India-US trade discussions, which aim for an agreement before August 1.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted a persistent resilience in the market despite high valuations. He attributed this to the bullish sentiment in the US market, where the S&P has hit record highs multiple times this year, providing psychological support. Additionally, strong domestic institutional investor (DII) activity continues to bolster the market. DIIs have been net buyers in 14 out of the last 15 trading days, effectively counterbalancing foreign portfolio investor (FPI) selling.

“An area of concern in the near-term is the uncertainty regarding an interim trade deal between US and India. If India doesn’t get a favourable deal with tariffs below 20 percent that would be a short-term negative from the market perspective.”

—VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited

Global Cues and Economic Indicators

Globally, US markets experienced a strong performance on Monday, with the S&P 500 and Nasdaq reaching new closing highs, driven by large-cap stocks. Investor optimism regarding potential trade agreements to mitigate the economic impact of global tariffs played a significant role. Asian equities followed suit, advancing as US markets hit new highs. Conversely, oil prices saw a dip on Tuesday amid concerns over potentially reduced fuel demand growth, exacerbated by ongoing trade tensions between major consumers like the US and the European Union.

On Monday, foreign portfolio investors divested shares worth ₹1,681 crore, while domestic institutional investors were net buyers, injecting ₹3,578 crore into the market. This dynamic reflects a shift in institutional investment patterns.

The S&P 500 recently closed above 5,500 points for the first time, signaling continued strength in the US equity landscape, a trend that often influences global markets (CNBC, July 2024).