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Indian equity markets rallied sharply on Wednesday, September 10, 2025, driven by renewed optimism surrounding India-US trade negotiations. The benchmark indices Sensex and Nifty posted robust gains, buoyed by positive global cues, strong buying in IT stocks, and foreign institutional investor inflows. The rally was further supported by encouraging statements from both US President Donald Trump and Indian Prime Minister Narendra Modi, signaling a potential breakthrough in bilateral trade discussions.
This development comes at a time when markets have been grappling with valuation concerns and global macroeconomic uncertainty. The upbeat sentiment has helped reverse a multi-week consolidation phase, with Nifty reclaiming the 25,000 mark and Sensex nearing record highs.
Key Highlights From The Market Session
- Sensex rose 491 points or 0.61 percent to close at 81,592.48
- Nifty gained 152 points or 0.61 percent to settle at 25,021.00, crossing the 25,000 threshold for the first time in over two weeks
- IT stocks led the rally, with HCL Tech, TCS, Tech Mahindra, Infosys, and L&T among the top gainers
- Foreign institutional investors turned net buyers, purchasing equities worth Rs 2,050 crore on Tuesday
- The rupee appreciated by 5 paise to 88.10 against the US dollar, supported by fund inflows and a softer greenback
Drivers Of The Rally
1. Positive signals from India-US trade talks
Investor sentiment was lifted after US President Donald Trump expressed confidence in reaching a successful conclusion to trade negotiations with India. In a social media post, he stated that he looked forward to speaking with Prime Minister Modi in the coming weeks. Modi responded affirmatively, emphasizing the potential of the partnership. These developments have been interpreted as a thaw in recent trade tensions and a step toward deeper economic cooperation.
2. Strong global cues
Asian markets traded in the green, with indices in South Korea, Japan, China, and Hong Kong posting gains. Wall Street closed higher on Tuesday, supported by expectations of a Federal Reserve rate cut following weak labor market data. The global risk-on sentiment provided a supportive backdrop for Indian equities.
3. IT sector momentum
The Nifty IT index climbed 2.5 percent, with individual stocks gaining up to 7 percent. The rally was driven by hopes of increased outsourcing demand and favorable currency movements. Investors also anticipate margin expansion if US interest rates decline, boosting tech sector profitability.
4. Foreign investor activity
After a period of sustained selling, foreign institutional investors turned buyers, injecting fresh capital into Indian equities. The reversal in FII flows is seen as a vote of confidence in India’s macroeconomic stability and policy direction.
5. Currency and commodity dynamics
The rupee strengthened modestly against the dollar, aided by foreign inflows. However, gains were capped by rising crude oil prices, which climbed following geopolitical tensions in the Middle East. Brent crude rose 0.87 percent to USD 66.95 per barrel.
Sectoral And Technical Overview
The rally was broad-based, though IT and banking stocks outperformed. Kotak Mahindra Bank and L&T saw strong buying interest, while auto stocks such as Maruti and Tata Motors lagged. Analysts noted that the Nifty’s breach of 25,000 could trigger further upside, with technical indicators pointing to a potential move toward 25,400 in the near term.
Market strategists cautioned that while trade optimism is a strong catalyst, high valuations in the broader market may limit sustained rallies unless earnings growth picks up. Investors are advised to monitor developments in trade talks and macro data releases closely.
Momentum Ahead
The sharp uptick in Sensex and Nifty underscores the market’s sensitivity to geopolitical and trade signals. As India and the US move closer to resolving trade barriers, equity markets may continue to reflect optimism, especially in export-oriented and tech-heavy sectors.
However, sustained gains will depend on the actual outcomes of the negotiations and the pace of policy implementation. For now, the market has welcomed the diplomatic overtures with enthusiasm, setting the tone for a potentially bullish phase.
Sources: Moneycontrol, Times of India, The Hindu
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