Sensex, Nifty Rise in Early Trade Amid Trade Deal Optimism and IT Stock Rally, But See Profit Booking Soon After

Mumbai, July 2: Indian benchmark indices commenced trading on Wednesday with gains, propelled by positive manufacturing data, optimism surrounding a potential trade agreement with the United States, and strong buying interest in IT blue-chip stocks. However, the positive sentiment remained temporary as both indices fell with time.

Although the BSE Sensex jumped 236.56 points to reach 83,933.85, and NSE Nifty climbed 66.3 points to 25,608.10 during the opening session, they were trading lower at 83,555.21, down by 142 points and 25,490.35, down by 51.45 points, respectively.

IT Stocks Lead the Opening Rally

Leading the charge among Sensex gainers were prominent IT companies, including Infosys, Tech Mahindra, and Tata Consultancy Services, reflecting a broader positive sentiment towards the tech sector. Other top performers included Tata Steel, Sun Pharma, and Tata Motors. Conversely, some selling pressure was observed in stocks like Bajaj Finserv, Asian Paints, Bharat Electronics, and Bajaj Finance.

Economic Indicators Provide Tailwind

Supporting the market’s upward trajectory were strong domestic economic indicators. India’s manufacturing sector demonstrated notable momentum, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) rising to 58.4 in June. This is the highest in 14 months, an increase from 57.6 in May, signalling improved output, increased new orders, and a record surge in employment across the sector. A PMI reading above 50 indicates expansion, and the current level suggests robust health in the manufacturing segment.

Furthermore, gross GST collections grew 6.2% year-on-year to ₹1.84 lakh crore in June. While this figure is slightly lower than the ₹2 lakh crore mark achieved in the preceding two months, it still reflects healthy tax collection and economic activity.

Global Cues and FII Activity

Asian markets painted a mixed picture. Kospi, Nikkei 225, and SSE Composite were trading lower, while Hong Kong’s Hang Seng edged higher. US markets closed mixed on Tuesday.

On the commodities front, Brent crude edged up by 0.06% to USD 67.15 per barrel.

Meanwhile, Foreign Institutional Investors (FIIs) sold ₹1,970.14 crore worth of Indian equities on Tuesday, according to exchange data.

Previous Close Recap

On Tuesday, the Sensex had gained 90.83 points (0.11%) to close at 83,697.29, and the Nifty advanced 24.75 points (0.10%) to settle at 25,541.80.

What Pushed the Indices Lower?

Despite a strong start, Indian benchmark indices reversed gains due to profit booking and cautious sentiment around global cues. Weakness in broader Asian markets, mixed signals from US equities, and continued foreign institutional investor (FII) outflows weighed on sentiment. Additionally, traders booked profits in key sectors after the morning rally, especially as IT stocks lost steam later in the session. Rising global uncertainty and lack of fresh domestic triggers also contributed to the late-morning weakness.

What’s Ahead For the Day?

Markets are expected to remain range-bound as investors weigh global cues and await fresh triggers. The focus will shift to upcoming US macro data, FOMC minutes, and any further updates on the potential India–US trade agreement. Domestically, IT stocks may see selective interest ahead of Q1 earnings, but profit booking could continue if broader sentiment stays cautious.

Key Levels to Watch

Nifty 50

• Support: 25,420 / 25,300
• Resistance: 25,620 / 25,750

Sensex

• Support: 83,400 / 83,200
• Resistance: 83,900 / 84,100

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