The benchmark indices Sensex and Nifty were trading 1% higher each on Friday, as concerns about a trade war eased after China said it was considering trade talks with the United States. A sharp drop in oil prices, in-line auto sales numbers for April, and all-time high GST numbers all contributed to the sentiment.
After a public holiday for Maharashtra Day, the BSE benchmark Sensex rose 766.49 points, or 0.96 percent, to 81,008 today. The NSE barometer Nifty was trading at 24,585.85, up 251.65 points, or 1.03%.
"The overall trend for the Nifty is bullish, as it continues to trade above all key moving averages. The Nifty's immediate support is at 24150, below which it could fall further to 23870. On the higher side, the 24,450-24,500 band is expected to remain a significant resistance level," said Devarsh Vakil, Head of Prime Research at HDFC Securities.
Adani Ports led Sensex gainers, rising 6% to 1,290 on strong Q4 results. Maruti Suzuki, Eternal, Tata Motors, and IndusInd Bank all saw gains of 2-3%. In the broader market, 2,307 shares rose against 1,205 that fell today.
According to Kranthi Bathini of WealthMills Securities, trade tensions between the United States and China have eased as both countries expressed a willingness to begin negotiations. He mentioned that the US Trade Representative stated that trade agreements with some of the country's major trading partners are likely to be reached within the next few weeks, providing relief to global markets.
"In the United States, signs of a cooling labor market (jobless claims increased by 18,000) and weakening manufacturing activity sparked new concerns. This follows a dismal GDP report, which showed that US GDP fell by 0.3% in the first quarter of 2025," he said.
Oil prices and car sales data
According to Vakil, oil prices have dropped the most significantly monthly in nearly three and a half years after Saudi Arabia signaled a shift toward increased production and market share. Furthermore, Indian automakers reported April monthly sales numbers in line with market expectations, with M&M leading the way, he said.
GST Data
In April, India's GST collection increased by 12.6% year on year to a record high of approximately Rs 2.37 lakh crore. This represents the highest monthly collection since the tax was implemented in 2017. According to Vakil of HDFC Securities, GST revenue from domestic transactions increased by 10.7% to around Rs 1.9 lakh crore, while imports increased by 20.8% to Rs 46,913 crore.
Hopes for an India-US trade deal
According to Nomura, India's relative tariff advantage will be sustained due to its first mover advantage in the trade deal. According to the report, India and the United States have already signed the terms of reference for a bilateral trade agreement, which serves as a road map for future negotiations.
"Details are not known, but news reports suggest the agreement has 19 chapters, covering tariff and non-tariff barriers, trade in goods and services, rules of origin, customs facilitation, digital trade and data storage, agriculture and market access, and intellectual property rights, among others," according to the the release.
What lies ahead?
According to JM Financial, Nifty has historically exhibited only average price seasonality in May, with the NSE benchmark closing in the green on six of the previous ten occasions, with an average return of 1.5 percent and a median return of 2 percent, respectively.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, stated that at the current juncture of high valuations (the Nifty trading at more than 20 times estimated FY 26 earnings) and high India-Pak tensions, the near-term risk-reward is not in favor of high reward. He advised investors to play it safe by increasing the cash component of their portfolios even while remaining invested.
