Stock Market soars on RBI's bumper support and trade talk optimism
Stocks in India commence trading with an upward trend, propelled by positive global market sentiments and monetary policy support from the Reserve Bank of India (RBI).
India's benchmark Nifty 50 logs its best day in three weeks
Stock markets in India started the week on a promising note, with the Nifty 50 and Sensex opening higher on Monday. This upward trend was driven by positive global cues and progress in US-India trade talks as well as the Reserve Bank of India's (RBI's) bumper monetary policy measures.
As of 9:15 am IST, the Nifty 50 was up by 0.63%, trading at 25,160.1, while the BSE Sensex gained 0.47%, reaching 82,574.55. All 13 major sectors made gains, with high-weightage financials and private banks rising approximately 1% each. The broader small- and mid-caps also climbed about 0.7% each.
The rally in both indices comes after the RBI cut the repo rate by 50 basis points and reduced the cash reserve ratio (CRR) for lenders by 100 bps last Friday, causing the Nifty 50 and BSE Sensex to surge about 1% each. The upbeat global sentiment also played a role, as a robust US jobs report eased concerns over economic momentum and the MSCI Asia ex-Japan index increased by 0.7%.
In the ongoing trade talks between United States and Indian officials, both sides are striving for consensus on tariff cuts in the farming and auto sectors, potentially finalizing an interim deal before a July 9 deadline. Indian government sources have reported progress in these discussions. Investors also eagerly await trade talks between the US and China in London later today, focusing on critical minerals whose production is predominantly controlled by China.
Looking ahead, the success of the proposed trade deal could have various implications for the Indian stock market. A trade agreement could lead to increased investments and trade volumes, benefiting sectors such as textiles, gems, and jewelry, which are seeking duty concessions. However, resistance to US demands on agricultural imports might create uncertainty and potentially impact companies that rely on imports or exports to the US. Market volatility may also arise as investors react to news about progress or setbacks in trade negotiations and potential changes in trade policies and tariffs.
As the negotiations continue, investors remain optimistic about the potential benefits that a successful trade deal could bring to both the Indian economy and the stock market, particularly in sectors that stand to reap the rewards of reduced tariffs and increased market access.
- The momentum of India's stock market grew on the back of the Reserve Bank of India's (RBI's) bumper monetary policy measures and optimism from US-India trade talks.
- In the general-news sphere, investors are closely watching the progress of trade talks between the United States and India, focusing on potential tariff cuts in the farming and auto sectors that could impact various financial indexes and businesses.
- The success of the proposed trade deal could lead to increased financial momentum for sectors like textiles, gems, and jewelry in India, as they seek duty concessions, but could also create uncertainty for companies that heavily rely on imports or exports to the US.
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