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Below the Quote on Daily market commentary by Mr. Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd

Indian equities managed to end on a positive note on Wednesday, with the Nifty closing at 24,414 (+35 points), after a volatile session, as cautiousness prevailed after India striked 9 terror camps across the border and LOC. The Nifty Midcap 100 rose 1.6% and the Nifty Smallcap 100 gained 1.4%, reflecting broad-based strength in the broader markets. In a major development, India and the United Kingdom have finalized the Free Trade Agreement (FTA) after over three years of negotiations. The FTA is likely to boost bilateral trade and investment between both the countries and benefit several Indian sectors like textiles, auto and auto ancillaries, pharma, agri products, gems & jewellery. This helped improve domestic sentiments and provide support to market on a volatile day.

The Nifty Financial Services (ex-Banking) index surged 2.8%, driven by strong gains in BSE following robust quarterly results. Meanwhile, the Nifty Auto index rose 1.6%, buoyed by the positive momentum from the India-UK Free Trade Agreement. On the downside, the Nifty FMCG index fell 0.6%, weighed down by weak earnings and a dim outlook from Godrej Consumer Products Ltd (GCPL), which impacted the broader sector. The Nifty Pharma index slipped 0.3%, as concerns mounted after U.S. President Donald Trump’s recent executive orders aimed at reshoring drug manufacturing to the U.S., which could negatively affect Indian pharma exporters of APIs and intermediates.

Looking ahead, progress on the U.S.-India trade deal is expected to provide near-term support, especially for export-driven sectors. Key geopolitical developments, corporate earnings reports, and macroeconomic data from the U.S. are likely to be closely watched, with the potential for short-term consolidation depending on how these factors unfold. Markets will also focus on important earnings announcements scheduled for Thursday, including from L&T, Britannia, Titan, Pidilite, Biocon, Bharat Forge, Union Bank, and Canara Bank.

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