Domestic equity markets opened flat on Thursday as investors awaited the formal signing of the India-UK Free Trade Agreement (FTA), which is expected to provide a boost to market sentiment.
The Nifty 50 index started at 25,243.30, gaining 23.40 points (0.09%), while the BSE Sensex opened at 82,789.23, up 62.59 points (0.08%).
Experts believe the FTA with the UK, along with recent global trade developments like the US-Japan deal, could trigger a market rally if further positive announcements follow.
Market analyst Ajay Bagga stated, “India’s FTA with the UK should support the markets. Any update on the US-India trade deal, especially with the August 1st deadline approaching, could lead to a significant short squeeze, given the 85% net short position of Foreign Portfolio Investors (FPIs).”
Despite being net sellers in the secondary market, FPIs have actively participated in IPOs and recent large-scale promoter and PE fund-driven QIPs and block deals, amounting to nearly ₹1.5 lakh crore.
Globally, the US-Japan trade deal has created a “risk-on” sentiment, boosting equities across Asia, Europe, and the US. Anticipation also builds ahead of the US-China Trade Summit in Stockholm, which may provide clarity on China’s position regarding oil imports from Iran and Russia.
While Nifty Auto declined slightly (0.04%) and Nifty IT traded flat in red, other indices such as Nifty FMCG (+0.27%), Media (+0.29%), PSU Bank (+0.23%), and Realty (+0.06%) gained.
Akshay Chinchalkar, Head of Research at Axis Securities, noted, “The recovery above the 50-day moving average suggests the recent dip may have been a bear trap. 25,000 is a crucial support, while a close above 25,340 would confirm bullish momentum.”
Major companies announcing quarterly results today include Bajaj Finance, Nestle India, SBI Life, REC, Adani Energy, Canara Bank, Indian Bank, and MphasiS among others.
Asian indices remained strong—Japan’s Nikkei surged 2%, Singapore’s Straits Times gained 0.58%, Hong Kong’s Hang Seng rose 0.47%, Taiwan’s index edged up 0.28%, and South Korea’s KOSPI climbed 0.37%.