Benchmark stock indices closed higher on Wednesday, rising 0.5%, as gains in heavyweight financial and pharma stocks fueled a market rally.
The S&P BSE Sensex gained 410.19 points to close at 81,596.63, while the NSE Nifty added 129.55 points to end at 24,813.45.
Vinod Nair, Head of Research, Geojit Investments Limited, said that the markets exhibited a broadly positive undertone today; however, overall sentiment remained confined within a narrow range, indicating risk of “sell on rallies” strategy in the near future amid escalating uncertainty around India – US trade negotiations.
“There is a growing perception that India may not derive the anticipated benefits initially projected during the peak of the tariff war, which has since de-escalated,” he added.
Foreign institutional investors turned net sellers amid concerns over the recent U.S. credit rating downgrade, proposed tax cuts that may significantly widen the fiscal deficit, and the potential impact on the Federal Reserve’s policy next month. This shift suggests a growing risk-averse sentiment in the near term.