Indian Markets At All-Time High Despite US Trade Deal Limbo

Indian equity markets reached all-time high levels this morning, extending a rally driven by expectations of US and domestic rate cuts. Nifty 50, the benchmark index that tracks the 50 most valuable companies listed on the National Stock Exchange, is trading above 26,277 points, the previous all-time high recorded in September 2024.

It took about 289 sessions and roughly 14 months for Nifty to surge past despite hesitation in the markets, the absence of a trade deal with the US, and other geopolitical developments. Bharti Airtel, ICICI Bank, and Reliance Industries Ltd were among the scrips that contributed the most to the Nifty's all-time high score.

Sensex also surpassed its previous high of 85,978.25 points from last year, briefly crossing the 86,000 level.

Indian equity markets have underperformed their Asian peers, dragged by high valuations and muted corporate earnings. It also had to bear the brunt of trade and geopolotical uncertainties, worsened by foreign outflows.

A hestitation remained in the markets to approach the high levels until an improvement in earnings. The market outlook changed with eased valuations, tax cuts, and easing of rates.

Over the last five months, Nifty charted its best session, convinced that the US Federal Reserve woud cut rates next month and a similar rate cut by the Reserve Bank of India next month.