Dalal Street Rides High On India-EU Deal, Sensex Over 350 Points Up, Nifty Crosses 25,300

Dalal Street remained cautiously optimistic on Wednesday morning, after India and the EU announced a landmark free trade agreement yesterday. The BSE Sensex started the session near 82,200, climbing more than 350 points, while the NSE Nifty50 opened trading around 25,300, clocking a surge of nearly 130 points, as of 9:15 AM.

In the pre-open hour, the Sensex tested 81,900 and the Nifty inched over 25,250, near 9:11 AM.

On the 30-share Sensex, Asian Paints, Maruti, SBI, HCL Tech, Kotak Bank, and Bharti Airtel emerged among the only laggards in the morning. Meanwhile, Axis Bank, Reliance, Bajaj Finserv, Trent, and Bajaj Finance dominated in green.

In the broader markets, the Nifty Smallcap100 index surged 1.23 per cent. Sectorally, the Oil & Gas and Realty indices stood out with bumper gains of 2.23 per cent and 1.86 per cent respectively. At the same time, the FMCG index slipped 0.41 per cent.

India-EU FTA Sparks Optimism

Investor sentiment remained upbeat following the announcement of the India-EU free trade agreement, described by policymakers as the “mother of all deals”. The pact is expected to create a combined market of nearly two billion people, with trade and defence cooperation forming the core of a new five-year strategic agenda unveiled by Prime Minister Narendra Modi and top EU leaders.

According to officials, the agreement will reduce tariffs on 99 per cent of Indian exports to the EU and cut duties on more than 97 per cent of EU exports to India. The deal is projected to cover almost a quarter of global GDP, underscoring its long-term significance for India’s trade and investment landscape.

Institutional Flows And Global Cues In Focus

On the institutional front, Foreign Institutional Investors (FIIs) continued to pare exposure to Indian equities, selling shares worth Rs 3,068.49 crore on Tuesday, according to exchange data. Domestic Institutional Investors (DIIs), however, provided strong support to the market, buying equities worth Rs 8,999.71 crore.

“FIIs continued their selling spree with cash market selling of around Rs 3,068 crore. DIIs, flush with funds, aggressively bought beaten-down, fundamentally strong stocks for a massive Rs 8,999 crore,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.

He added that while the India-EU trade agreement is a major long-term positive, investor focus is now shifting towards the Union Budget scheduled to be presented on February 1.

Asian Markets Mixed, Wall Street Firm

Asian markets were largely positive, with South Korea’s Kospi, Shanghai’s SSE Composite and Hong Kong’s Hang Seng trading higher. Japan’s Nikkei 225, however, was quoting lower in early trade.

US equity markets ended mostly higher on Tuesday, offering additional support to risk sentiment.

Crude Prices Edge Higher

In the commodities market, Brent crude, the global oil benchmark, climbed 0.52 per cent to $67.92 per barrel, as traders monitored global demand cues and geopolitical developments.

How Did Markets Fare Yesterday?

Notably, both benchmarks ended Tuesday’s session higher after a volatile day of trade, supported by strong buying in banking and metal stocks, positive global cues and optimism following the announcement of the India–European Union free trade agreement (FTA).

Gains, however, were capped by subdued third-quarter corporate earnings growth and persistent selling by foreign portfolio investors, which kept investor sentiment guarded, market participants said.

The Sensex rose 319.78 points, or 0.39 per cent, to close at 81,857.48. During the session, the index swung sharply, touching an intra-day high of 82,084.92 and a low of 81,088.59. The Nifty advanced 126.75 points, or 0.51 per cent, to settle at 25,175.40.