Guwahati: Indian stock benchmarks started Thursday on a positive note, boosted by fresh optimism about a possible trade breakthrough between India and the United States. The Nifty 50 gained 0.41 percent to 25,555, and the Sensex rose 0.42 percent to 83,752 in early trade. Trading sentiment was also boosted by general regional trends, with the MSCI Asia ex-Japan index showing modest gains as fears of global inflationary pressures eased.
The rally comes after news of a completed U.S.–Vietnam trade deal, which analysts say has the potential to open the door for a similar U.S.–India pact that is set to be wrapped up by July 9. "Markets are hopeful," CapitalVue Advisors' Chief Market Strategist Rajeev Chauhan said. "A clean-through settlement on tariff conditions can give a big fillip to investor sentiment, particularly in capital goods and export-oriented segments.
While the green opening was encouraging, market volatility continues to be a point of concern. The India VIX index, measuring anticipated market volatility, was at 12.44, just short of the crucial 13 level. Experts interpret this as an indicator of managed uncertainty, albeit volatility will likely surge as earnings of large caps start coming in and IPO lock-in periods draw near expiration.
Among sectoral leaders, auto shares paced the advance with a 1.1 percent intraday rise, followed by gains in the IT, pharma, and metal sectors. Banking behemoths also traded steady, amidst HDFC Bank and ICICI Bank registering gains of 0.7 percent and 1 percent respectively.
The session also witnessed high demand for newly listed names. HDB Financial Services, which listed on July 2 with the biggest issue of the year ( Rs 12,500 crore), continued its rally with a 4% jump, trading at Rs 847. The listing of the company had already given a 12.8 percent premium, reflecting consistent retail and institutional buying. Other aggressive counters were Nykaa, Vodafone Idea, Suzlon Energy, and GACM Tech, which controlled NSE volumes.
At the same time, mid- and small-cap indices appreciated 0.5 percent, indicating more risk appetite from local and retail investors. However, some stocks such as VST Industries witnessed aggressive profit booking, cutting a nine-day winning streak by falling 5.35%.
In the IPO arena, July looks set to be India's busiest in almost 18 months. The month is likely to see in excess of $2.4 billion worth of IPO activity, driven by listings by Credila, NSDL, Aditya Infotech, and JSW Cement. Experts caution near-term volatility as Rs 1.86 billion lock-in shares of IPO are coming up for expiry in the month, affecting stocks like Jyoti CNC, Unimech Aerospace, and Medi Assist.
The subsequent 10 days will be critical," said Sudeep Shah, Head of Equity Research at SBI Cap Securities. "Traders need to look out for a potential Nifty breakout above 25,600 and monitor VIX levels carefully. Quality midcaps and value PSUs are still good bets."
Overall foreign investor sentiment also indicated moderate strength. FIIs (Foreign Institutional Investors) were net buyers of Rs 1,232 crore on July 2, while domestic institutions sold profits of Rs 418 crore.
ALSO READ: India, US in Race Against Time to Finalise Trade Agreement Before Tariff Deadline
On the investment ideas front, brokerages have suggested short-term momentum stocks in auto, pharma, and IT, while long-term investors are being suggested to buy stocks like Apollo Hospitals, LT Foods, SBI, HAL, and Coal India on declines. Technical indicators also point towards a bullish double-bottom breakout pattern in Asian Paints, with a resistance watch at ₹2,470.
Even though no Northeast-based firms went out for IPOs this month, regional investor appetite continues to be high in light of Assam's recent tea export drive in the U.S. and addition to India's mineral auction map—initiatives that can form the foundation for future capital market entry from the region.
As trading continues, market players are still keenly interested in two triggers—completion of India–U.S. trade deal by July 9, and beginning of Q2 earnings season. Any surprise on either side would result in a sharp shift in risk appetite.
FIRST Business Portal addressing the potential of business capability of North East Region.
