The Sensex advanced 539.83 points, or 0.66%, to settle at 82,726.64, while the Nifty gained 159 points, or 0.63%, to close at 25,219.90.
The market capitalization of all listed companies on the BSE increased by Rs 82,186 crore to Rs 460.37 lakh crore.
Both the benchmark tracked a rally across Asian markets. MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.4%, while Japan’s Nikkei 225 surged 3.5%, as investor sentiment improved ahead of a fresh round of EU-U.S. trade discussions later in the day.
In contrast, prospects for a limited trade deal between India and the U.S. ahead of Washington’s August 1 deadline appeared to have faded, with talks reportedly stalled over tariff concessions on key agricultural and dairy products, according to Reuters, citing Indian government sources.
Financial and information technology stocks added 0.8% and 0.3%, respectively, with HDFC Bank and ICICI Bank extending their post-earnings rally for a third straight session, rising 0.9% and 1%.Mid-cap stocks edged up 0.3%, while the broader small-cap segment was little changed.Real estate lagged, with the sector index shedding 2.6% amid heavy selling in Lodha Developers and Oberoi Realty, which fell 7.5% and 3.1% following sizable block deals.
Tata Consumer Products declined 2.1%, while Dr Reddy’s Laboratories rose 0.6% ahead of quarterly results.
Expert Views
The Indian equity market demonstrated resilience despite a mixed start to Q1FY26 earnings and positive global cues, underpinned by optimism surrounding the U.S.-Japan trade agreement, have supported sentiment, said Vinod Nair, Head of Research, Geojit Investments.
“Additionally, progress toward finalising the India-UK FTA has further contributed to the constructive outlook. Continued advancements in global trade negotiations are expected to alleviate near-term trade tensions and foster greater market stability,” said Nair.
On a technical basis, the Nifty has moved above the 21-day EMA on the daily timeframe, indicating an increase in bullish sentiment, supported by improved optimism following the trade deal between the U.S. and Japan, said Rupak De, Senior Technical Analyst at LKP Securities.
“The RSI on the daily chart is in a bullish crossover and rising above the 50 mark, further reinforcing the positive momentum. In the short term, sentiment is likely to remain optimistic. On the higher side, Nifty may move towards 25,500, while support is placed at 24,900. A break below this level could weaken the current trend,” said De.
Global Markets
World equities rallied on Wednesday, underpinned by optimism over trade diplomacy after Japan struck a tariff-reducing agreement with the United States, lifting sentiment across major markets and sending Japanese shares to a one-year high.
Tokyo’s Nikkei 225 surged 3.5% following the announcement of a deal that lowers U.S. import duties on Japanese autos to 15%, averting a previously threatened 25% tariff that was set to take effect on August 1. While exclusions remain for certain goods such as steel and aluminium, the agreement marked a key step toward de-escalating trade tensions.
In Asia, Chinese blue-chip shares advanced 0.7% before paring gains, and MSCI’s broadest index of Asia-Pacific stocks outside Japan added 1.2%.
European markets followed suit, with the Euro Stoxx 600 rising 1% and auto stocks jumping 3.6%. UK equities climbed 0.5%, notching a fresh record high.
Japanese Prime Minister Shigeru Ishiba said the U.S. had agreed not to impose volume caps on Japanese auto exports. U.S. President Donald Trump, posting on Truth Social, touted the pact as a win for American agriculture and industry, citing $550 billion in planned Japanese investments and improved access for U.S. rice, cars, and farm products.
Crude Impact
Oil prices held near recent lows on Wednesday, stabilising after three straight sessions of declines, as a U.S.-Japan tariff agreement helped ease broader concerns over global trade tensions.
Brent crude slipped 12 cents, or 0.2%, to $68.47 a barrel by 0907 GMT, while U.S. West Texas Intermediate (WTI) fell 14 cents, also 0.2%, to $65.17.
Rupee vs Dollar
The Indian rupee ended marginally weaker on Wednesday, easing slightly from its previous close of 86.3675 but managing to stay above the critical 86.50 support level, supported by strength in the Chinese yuan and steady exporter dollar sales.
Meanwhile, the U.S. dollar index, measuring the greenback against a basket of six major currencies, edged up 0.04% to 97.16.
(with inputs from agencies)
