Indices hit 13-month high on hopes of India-US trade deal

Mumbai: Key indices surged to their highest levels in 13 months on Wednesday, aided by optimism around a potential US-India trade deal and expectations of an interest rate cut by the US Federal Reserve overnight.

NSE's Nifty rose 117 points, or 0.45%, to close at 26,053. BSE's Sensex rose 368 points, or 0.44%, to end at 84,997. Both indices saw their best closing levels since September 27 last year.

"We believe benchmark equity indices are poised to reach new all-time highs in the coming days, driven by strength in three key sectors - IT, BFSI and Oil and Gas, which together account for roughly 55% of the Nifty's weight," said Pankaj Pandey, head of fundamental research at ICICI Direct.


His target on the Nifty is 26,300 in the near term and 27,000 next year. Nifty is currently over 200 points shy of its record levels of 26,277.

"While Nifty managed to close above the 26,000 level on the first day of the November series, follow-up buying was missing, which could have taken the index up to 26,100-26,200," said Rajesh Palviya, head of technical and derivatives research at Axis Securities. "Currently, the markets are moving on the back of newsflow, and street participants will closely be watching the US Fed meet outcome and any trade deal news from the US and China, which will then decide the direction of the indices."

Palviya said Nifty may consolidate over the next few days, but as long as it remains above the 25,800, the bullish views remain intact, and the street could see fresh all-time highs in the first half of November itself.