Stock markets rebound as US, India begin trade talks

Stock markets rebounded on Tuesday with the benchmark Sensex climbing nearly 595 points on renewed optimism over the resumption of the India-US trade talks.
The 30-share BSE Sensex jumped 594.95 points or 0.73% to settle at 82,380.69 following buying in auto and IT shares. During the day, it surged 657.74 points or 0.80% to 82,443.48.
The 50-share NSE Nifty climbed 169.90 points or 0.68% to 25,239.10.
Chief negotiators of India and the US have commenced talks on the proposed trade agreement to iron out issues in the wake of steep tariffs that have created uncertainties for exporters, an official said on Tuesday.
A rally in Asian and US peers also instilled optimism in the domestic stock market ahead of this week’s US Federal Reserve policy meeting. Among Sensex firms, Kotak Mahindra Bank rose the most by 2.55%. Larsen & Toubro, Mahindra & Mahindra, Maruti, Bharti Airtel and Tata Steel were also among the major gainers.
Asian Paints and Bajaj Finance closed with losses.
“The domestic market sustained its recovery trend, supported by favourable global cues on expectations of a 25 bps rate cut in the forthcoming US Fed policy decision and renewed optimism surrounding the resumed India-US trade negotiations.
“Auto and consumer durable stocks outperformed, ahead of the rollout of new GST rates and festive-driven demand expectations,” Vinod Nair, Head of Research, Geojit Investments Limited, said.
The BSE smallcap gauge climbed 0.66% and midcap index went up by 0.62%.
Among sectoral indices, services jumped the most by 1.67%, followed by telecommunication (1.50%), auto (1.43%), teck (1.05%), industrials (1.05%), realty (1.02%), consumer discretionary (0.96%) and commodities (0.90%).
FMCG emerged as the only laggard.
“The rally was driven by strong gains in auto, realty, and financial stocks, as optimism grew around ongoing India-US trade talks and expectations of a US Federal Reserve rate cut later this week,” Gaurav Garg, Research Analyst, Lemonn Markets Desk, said.
Global cues also remained supportive, with investors betting on a 25-basis-point cut by the Fed in its policy meeting concluding September 17, he added.
“Indian benchmark indices on Tuesday session traded higher in line with Asian peers, as investors took comfort from progress in US trade talks. Market participants now await the US Federal Reserve’s policy decision for further cues,” according to Bajaj Broking Research.
In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index and Shanghai’s SSE Composite index settled in positive territory while Hong Kong’s Hang Seng ended lower.
Markets in Europe were trading lower. US markets ended higher on Monday.
Global oil benchmark Brent crude declined 0.55% to USD 67.07 a barrel.
Foreign institutional investors (FIIs) offloaded equities worth Rs 1,268.59 crore on Monday, according to exchange data.
On Monday, the Sensex declined by 118.96 points or 0.15% to settle at 81,785.74 after five days of rally. The Nifty settled lower by 44.80 points or 0.18% to 25,069.20, halting its eight-day uptrend.