After its gains in Wednesday morning trade, benchmark Sensex closed 323 points higher, as did Nifty, amid renewed optimism over the continuation of negotiations between India and the US on the impending trade deal.
Buying in IT stocks and gains in select financial and capital goods shares also helped the equity indices close higher for the sixth consecutive day.
The 30-share BSE Sensex climbed 323.83 points or 0.40 per cent to settle at 81,425.15, registering its third straight day of gain. During the day, it had jumped 542.56 points or 0.66 per cent to 81,643.88.
Rising for the sixth consecutive day, the 50-share NSE Nifty rallied 104.50 points or 0.42 per cent to close at 24,973.10, although it had crossed the 25,000-mark in the day.
Investors across the world are also more optimistic about possible rate cuts coming in from the US Federal Reserve next week.
Also Read: Sensex rises 314 pts amid IT stocks rally, US Fed rate cut hopes
Signalling a thaw in the bilateral chill between India and the US, President Donald Trump has said he feels “certain” that there will be "no difficulty" for the two countries to come to a “successful conclusion” in trade talks and he looks forward to speaking with his "very good friend” Prime Minister Narendra Modi in the coming weeks.
Responding to the post, Prime Minister Modi on Wednesday expressed confidence that the ongoing negotiations will pave the way for unlocking the limitless potential of the partnership between them.
Among Sensex firms, Bharat Electronics rose the most by 4.26 per cent. HCL Tech gained 2.57 per cent, Bajaj Finance by 2.19 per cent, TCS by 1.99 per cent, Tech Mahindra by 1.88 per cent and Infosys by 1.85 per cent. Gains in Axis Bank and State Bank of India also supported the rally.
However, Mahindra & Mahindra emerged as the biggest loser, falling by 2.47 per cent. Maruti dropped 1.53 per cent and Tata Motors by nearly 1 per cent due to profit-taking. UltraTech, Eternal and Power Grid were also among the laggards.
"Renewed optimism around ongoing trade negotiations between India and the US lifted market sentiment. Anticipation of stronger H2 FY26 earnings, driven by GST rationalisation and the benefits of monetary easing, is providing resilience to valuations," opined Vinod Nair, Head of Research, Geojit Investments Limited.
The BSE midcap gauge jumped 0.84 per cent and smallcap index climbed 0.72 per cent.
Among sectoral indices, BSE Focused IT surged 2.52 per cent, IT jumped 2.48 per cent, capital goods (1.88 per cent), teck (1.59 per cent), industrials (1.20 per cent) and realty (1.15 per cent).
Auto declined 1.21 per cent, consumer discretionary (0.52 per cent), consumer durables (0.22 per cent) and telecommunication (0.10 per cent).
Both Ajit Mishra, SVP, Research, Religare Broking Ltd, and Hariprasad K, Research Analyst and Founder, Livelong Wealth, agreed that progress in India-US trade talks was to be credited for the buoyancy in the stock markets.
“The uptrend was supported by renewed optimism over progress in India-US trade negotiations, alongside positive foreign flows in the cash market after a period of continuous decline, which further lifted sentiment," said Mishra.
"US political signals added optimism for Indian equities. Donald Trump noted that the US and India are “continuing negotiations to address trade barriers,” while reaffirming his ties with Prime Minister Modi. The comment fueled strength in IT stocks, with investors eyeing potential tailwinds for the export-driven sector," added Hariprasad K.
As many as 2,410 stocks advanced while 1,717 declined and 155 remained unchanged on the BSE.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng settled in positive territory.
Markets in Europe were trading higher, as were the US markets that ended higher on Tuesday.
Foreign Institutional Investors (FIIs) tuned buyers on Tuesday after days of offloading equities. They bought stocks worth ₹2,050.46 crore, according to exchange data.
Global oil benchmark Brent crude climbed 0.65 per cent to USD 66.82 a barrel.
On Tuesday, the Sensex climbed 314.02 points or 0.39 per cent to settle at 81,101.32. The Nifty rallied 95.45 points or 0.39 per cent to 24,868.60, registering its fifth day of gain.
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