India’s stock market indices closed higher on Tuesday, driven by improved investor sentiment following the announcement of a trade deal between India and the European Union. The Nifty increased by 0.51% to 25,175.40, while the Sensex rose by 0.39% to 81,857.48 at the end of trading. Experts suggest that a breakout above 25,400 is needed for a stronger bullish trend, while a drop below 25,000 could lead to increased selling pressure towards the 24,900–24,600 range.
The bilateral trade agreement between India and the EU aims to double EU goods exports to India by 2032 by eliminating or reducing tariffs on nearly 96.6% of EU goods exported to India. In return, the EU will reduce or eliminate tariffs on about 99.5% of goods imported from India, benefiting trade on both sides. Despite the positive market close, certain heavyweight stocks like Mahindra & Mahindra, Asian Paints, and Kotak Mahindra Bank experienced declines, with some stocks falling by up to 4%.
On the other hand, stocks such as Axis Bank, Adani Ports, and NTPC saw increased buying interest, rising by up to 5% and supporting the indices. The broader markets also showed positive sentiment, with the Nifty Midcap 100 index up by 0.59% and the Nifty Smallcap 100 gaining 0.41% by the session’s end. The Nifty Metal index performed well, surging by 3%, while the Nifty Media index dropped by 1.4% and the Nifty Auto index closed 0.9% lower.
Analysts noted that the market reacted positively to the long-term trade benefits expected from the India-EU deal, despite sector-specific weaknesses causing volatility. Investors are now looking towards the upcoming US FED interest rate decision and the Union Budget for future market direction.
