Dalal Street scripted a dramatic turnaround on Thursday, with the BSE Sensex vaulting 301 points to close at a multi-month peak, courtesy of reassuring words from the United States envoy. The Nifty too notched up impressive gains, defying intraday choppiness.
Central to the upswing was the ambassador’s forthright praise for India’s economic reforms and commitment to fair trade practices. The remarks, made amid ongoing negotiations, quelled fears of protectionist policies impacting bilateral commerce.
Buying frenzy engulfed large-caps first, then cascaded to others. Power, capital goods, and consumer durables led from the front, fueled by visions of infrastructure-led growth. Losers were few, mostly in the overbought IT space.
Data showed FIIs netting positive inflows for the first time this week, while DIIs mopped up dips aggressively. This tag-team effort stabilized sentiment after a shaky start influenced by Asian markets.
Market microstructure improved, with bid-ask spreads narrowing and volumes surging. Options data indicated hedging unwind, pointing to reduced fear levels.
Strategically, the index has reclaimed its upward trajectory, with RSI entering overbought yet sustainable territory. Near-term catalysts include Q3 earnings and festive season consumption trends.
The envoy’s intervention highlights diplomacy’s growing role in markets. As India positions itself as a counterweight to global slowdowns, such endorsements could sustain the momentum, benefiting long-term wealth creators.