Despite persistent uncertainties over the U.S. government’s trade stance, the Indian benchmark indices ended higher on Wednesday as a drop in domestic retail inflation lifted sentiment, raising hopes for a revival in discretionary spending. Firm cues from global markets also supported the rally, with the U.S. inflation print boosting expectations of a Federal Reserve interest rate cut in September.

The BSE Sensex ended 304.32 points, or 0.38%, higher at 80,539.91, while the Nifty50 rose 131.95 points, or 0.54%, to settle at 24,619.35. During the session, the 30-share Sensex rose by as much as 448 points to 80,683.74, while the Nifty50 climbed 177 points to touch an intraday high of 24,664.55.

The market saw broad-based buying, with the Nifty Midcap 100 and the Nifty SmallCap 100 indices gaining 0.63% and 0.66%, respectively.

The top gainers among the BSE Sensex pack were Bharat Electronics Limited, Eternal (Zomato), Kotak Mahindra Bank, Tata Motors, and Mahindra & Mahindra. Out of the shares of 30 companies traded on the Sensex, seven stocks ended in the negative, led by Adani Ports, ITC, UltraTech Cement, Titan, and Axis Bank.

"Indian equities experienced a broad-based optimism as CPI hit an eight-year low, boosting hopes for a revival in discretionary spending, led by autos and metals. Mid-caps outperformed, reflecting strong investor appetite. Globally, sentiment improved on the extension of China’s tariff deadline and easing oil prices,” said Vinod Nair, Head of Research, Geojit Investments.

Despite uncertainties around Trump’s trade stance and global risks, India’s growth-inflation dynamics remain favourable for FY26 with risk to marginal downgrade based on tariff updates. India looks forward to the Trump-Putin meet dated 15th August," he added.

On the sectoral front, pharma, auto, and metal stocks were among the top performers, while FMCG, PSU Bank, and oil and gas sectors saw some consolidation.

The positive momentum reflects a confluence of supportive domestic and global factors that have temporarily alleviated concerns over US-India trade tensions and tariff uncertainties, said Vaibhav Vidwani, Research Analyst at Bonanza.

“The market's ability to recover decisively from recent lows demonstrates underlying resilience supported by strong domestic institutional flows and improving macroeconomic indicators,” he said.

He further said that market participants are now closely monitoring the outcome of U.S.-Russia diplomatic discussions and potential developments in U.S.-India trade relations, which could provide further directional cues.

Technical view

For Nifty, the 24,700-24,740 zone is likely to act as a key resistance in the near term. A sustained move above 24,740 could fuel further upside, extending the ongoing pullback rally towards 24,900, said Sudeep Shah, Head-Technical Research and Derivatives at SBI Securities.

On the downside, support is placed between 24,480 and 24,450. A decisive break below 24,450 may indicate a resumption of the downtrend, opening the door for a slide toward the next crucial support at 24,300, he said.

For Bank Nifty, the 100-day exponential moving average (EMA) remains key support; holding above it could sustain consolidation and pave the way for recovery. Resistance lies at 55,500–55,600, with a breakout above 55,600 likely to spark a sharp rally. A fall below 54,850 may invite renewed selling and a deeper correction, said an analyst at SBI Securities.

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