Indian equity markets opened strongly on Wednesday, extending gains from the previous session as the long-awaited India-European Union free trade agreement (FTA) boosted investor sentiment.
The Sensex climbed 545 points, or 0.67 per cent, to 82,402, while the Nifty advanced 183 points, or 0.73 per cent, to 25,359.
The broader market followed the benchmark indices, with the Nifty Midcap 100 rising 0.77 per cent and the Nifty Smallcap 100 surging 1.17 per cent. Sectoral performance was largely positive, except for FMCG and PSU banks, which posted minor declines.
Nifty Oil & Gas led the gains, climbing 2.42 per cent as Brent crude touched $67 per barrel, its highest since October. Realty, metal and media stocks also advanced, up 1.54 per cent, 1.17 per cent and 1.45 per cent, respectively.
Market analysts noted immediate support at the 25,000–24,800 zone, while resistance lies between 25,300–25,400.
They highlighted the ongoing foreign institutional investor (FII) selling driven by high valuations, modest earnings growth, and a weaker rupee. Domestic institutional investors (DIIs), meanwhile, continued buying amid expectations of an earnings recovery.
FIIs’ Short Positions Could Fuel Further Rally
A significant feature of the current market is the large short positions taken by FIIs in index futures. Sustained cash market selling supports these positions, but any event triggering short covering could accelerate market gains.
Asian markets displayed mixed movements. China’s Shanghai index gained 0.49 per cent, Shenzhen added 0.09 per cent, and Hong Kong’s Hang Seng surged 2.31 per cent. Japan’s Nikkei fell 0.53 per cent, while South Korea’s Kospi rose 1.19 per cent.
US equities ended largely in positive territory during the last session, with the Nasdaq up 0.91 per cent and the S&P 500 rising 0.41 per cent, though the Dow fell 0.83 per cent.
Following the India-EU FTA, investors now focus on upcoming quarterly earnings and the Union Budget scheduled for February 1.
On January 27, FIIs sold net equities worth ₹3,068 crore, while DIIs purchased net equities worth ₹9,000 crore, reflecting continued domestic support.
Also Read: Sensex, Nifty End Higher As India–EU Trade Deal Lifts Market Sentiment
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