The barometer index, the S&P BSE Sensex, advanced 520.90 points or 0.65% to 80,116.49. The Nifty 50 index rose 161.70 points or 0.67% to 24,328.95. In the past seven trading sessions, Sensex and Nifty jumped 8.49% and 8.62%, respectively.

In the broader market, the S&P BSE Mid-Cap index rose 0.94% and the S&P BSE Small-Cap index added 0.26%. The market breadth was positive.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 0.30% to 15.52.

Among the sectoral indices, the Nifty IT index (up 4.34%), the Nifty Auto index (up 2.38%) and the Nifty Pharma index (up 1.40%) outperformed the Nifty 50 index.

Meanwhile, the Nifty Consumer Durables index (down 0.96%), the Nifty Private Bank index (down 0.75%) and the Nifty PSU Bank index (down 0.57%) underperformed the Nifty 50 index.

Politics:

Prime Minister Narendra Modi returned to New Delhi on Wednesday morning, cutting short his two-day visit to Saudi Arabia, following a devastating terror attack in Jammu and Kashmir’s Pahalgam.

At least 26 people, including two foreign nationals, were killed in what is being described as one of the deadliest attacks in the region in recent years. The strike occurred around 2:30 PM on Tuesday, when a group of heavily armed terrorists—disguised in military fatigues—opened fire on tourists gathered at Baisaran meadow, a popular scenic spot in Pahalgam.

The rare and brazen assault has sent shockwaves through the nation, with security forces launching a massive operation to track down the perpetrators.

Economy:

The International Monetary Fund (IMF) on Tuesday slashed India’s FY26 GDP growth projection to 6.2%, down from its earlier estimate of 6.5%, citing growing global trade tensions and economic uncertainty following the United States’ recent tariff imposition.

The downward revision comes as the U.S. levies a 26% tariff on imports from India, casting a shadow over India's trade outlook and prompting the IMF to temper its expectations. The FY27 growth forecast has also been dialed back to 6.3% from the earlier projection of 6.5%.

China’s growth outlook for 2025 has been cut to 4%, down from 4.6%, reflecting continued challenges in its property sector and weakening global demand. Meanwhile, the U.S. economy is projected to slow to 1.8%, a sharp decline from the 2.7% forecast in the IMF's January 2025 World Economic Outlook (WEO) update.

The HSBC Flash India Composite Output Index rose to 60.0 in April 2025 as compared to 59.5 in March 2025. The Flash India Manufacturing PMI jumped to 58.4 in April 2025 as against 58.1 in March 2025, indicating the strongest improvement in the health of the sector for one year. The HSBC Flash India Services PMI business activity index stood at 59.1 in April 2025 as against 58.5 in March 2025.

Pranjul Bhandari, Chief India Economist at HSBC, said, "New export orders accelerated sharply, likely buoyed by the 90-day pause in the implementation of tariffs. As a result, output and employment grew for both manufacturers and service providers. Cost inflation was in line with March levels, but prices charged rose a tad faster, leading to improved margins."

Numbers to Track:

The yield on India's 10-year benchmark federal paper grew 1.80% to 6.440, compared with the previous close of 6.422.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 85.4450 compared with its close of 85.1925 during the previous trading session.

MCX Gold futures for 5 June 2025 settlement fell 1.50% to Rs 98,878.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.21% to 99.19.

The United States 10-year bond yield fell 1.41% to 4.327.

In the commodities market, Brent crude for June 2025 settlement rose 86 cents or 1.28% to $68.30 a barrel.

Global Markets:

Dow Jones futures surged 700 points on Wednesday, setting the stage for a robust Wall Street open.

European markets advanced on Wednesday, as global market sentiment rebounded amid receding concerns over a trade war between the U.S. and China.

Most Asian markets ended higher, buoyed by optimism following a strong U.S. session. The cheer stems from growing hopes that U.S.-China trade tensions might be cooling off. President Trump hinted that upcoming tariffs on Chinese exports “won’t be anywhere near as high as 145%,” though he quickly added, “They won’t be 0% either.”

In a separate comment, Trump confirmed he has “no intention” of firing Fed Chair Jerome Powell before his term ends. That assurance calmed fears about potential political meddling in central bank affairs.

Back in Japan, the manufacturing scene remains in the doldrums. The au Jibun Bank manufacturing PMI for April ticked up to 48.5 from 48.4 in March. With a sub-50 reading, it still marks the tenth straight month of contraction.

Back in the U.S., stocks rallied hard on Tuesday. Trump’s toned-down rhetoric about Powell helped ease investor anxiety. The S&P 500 spiked 2.5%, the NASDAQ surged 2.7%, and the Dow soared 2.7% as traders hit the “buy” button across the board.

Tesla zoomed up 5.1% in after-hours trading, despite missing revenue and profit estimates for the March quarter. Elon Musk declared he’ll dial back his government engagements and shift focus squarely back to Tesla from May.