Sensex jumps 485 points; Nifty settles above 25,850: What's ahead for markets?

Indian equity benchmarks extended gains for the second consecutive session on Monday, driven by positive investor sentiment around trade developments and foreign fund inflows.

The 30-share BSE Sensex surged 485.35 points or 0.58 per cent to close at 84,065.75, while the NSE Nifty50 climbed 173.60 points or 0.68 per cent to 25,867.30.

Broader market outperforms

The broader market outperformed the frontline indices, with the Nifty Midcap index rising 1.58 per cent and the Nifty Smallcap index surging 2.64 per cent.

Vinod Nair, Head of Research at Geojit Investments, said, "Positive signals from the trade deal, coupled with the return of FIIs, fuelled a risk-on sentiment in the market. Investors are closely watching upcoming results, with PSU banks delivering stronger-than-anticipated performance, helping the PSU bank index outperform."

He added, "An accumulation strategy was observed in consumer durables and real estate stocks following the recent correction, driven by expectations of a demand revival. The recovery was broad-based, with sectors such as cement, capital goods, textiles, and consumer discretionary attracting investor interest, supported by union budget proposals and favourable trade deals."

Ponmudi R, CEO of Enrich Money, noted, "Indian equity markets traded with a cautiously positive bias today, with benchmark indices opening higher after the announcement of an interim framework for the India–US trade deal. Supportive cues from broader Asian markets also helped sustain the positive momentum through the session. However, despite the early uptick, participation remained selective, as investors refrained from aggressive positioning ahead of key global and domestic macro cues. Sectoral action remained positive, with buying interest in PSU banks, consumer durables, realty, defence, pharma and auto stocks, while IT stocks showed mixed trends amid ongoing assessment of global technology developments."

Overall, he noted that "the market appears to be in a phase of gradual recovery and consolidation, with the near-term direction likely to be driven by global macro developments, currency movements and the sustainability of risk-on sentiment reflected in foreign fund flows."

Technical outlook

Nilesh Jain, Assistant Vice-President (Derivative and Technical Research) at Centrum Broking, said, "A break above 26,000 level would signal positive sentiment for the benchmark Nifty50. If this happens, the index has the potential to hit 26,200 in the near term on the back of short covering."