Benchmarks Sensex and Nifty saw a sharp spike on May 17, after reports suggested that intense negotiations are underway between US and Iran.
Nifty rose as much as 1.26% or 300 points at 23,693.25, whereas Sensex rose as much as 1.19% or over 800 points at 75,452.70. The benchmark indices have cooled off very slightly as of 12:20 pm.
All sectors, barring IT, are in the green, with gains led by Pharma, Metal, and Financial Services.
The broader indices are trading mixed, with Nifty Smallcap 250 flat, lower by 0.09%, while the Midcap 150 rose 0.92%.
Here are three reasons why markets are rising today.
Optimism Around Trump-Xi Meet
On Wednesday, Trump landed in Beijing for a three visit to China , marking his first since 2017 to hold talks with Xi on a host of issues, including Iran war, trade, technology and Taiwan. The visit could reshape relations between the world's two largest economies for years to come.
During a bilateral meeting between the two leaders of world's largest economies, Xi reportedly told that if Taiwan is handled well, US-China relations “will enjoy overall stability." If not, risks of “clashes and even conflicts" may arise between the two countries, putting the entire relationship in great jeopardy,” Xi said.
Strong Earnings Season
Several large-cap companies have delivered robust Q4 results this earnings season, prompting Morgan Stanley to flag an inflection in earnings growth after a six-quarter mid-cycle slowdown.
The brokerage expects momentum to strengthen further, supported by reflationary measures from the RBI and the government, including rate cuts, banking reforms and liquidity support. It also cited sustained capex momentum in sectors such as energy, defence, semiconductors, fertilisers and data centres, alongside sizeable tax relief and an accommodative fiscal stance.
US Bond Yields Decline
Meanwhile, US Treasury yields edged lower. The benchmark 10-year yield slipped to 4.455%, while the 30-year yield declined to 5.027%. The 2-year yield, closely tracked for Federal Reserve rate expectations, eased to 3.965%. Softer bond yields tend to reduce the appeal of fixed income assets and can provide incremental support to risk assets, including equities.
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