Indian stock markets surged on May 15 after US President Donald Trump indicated that a trade agreement with India could be finalised soon. The announcement, coupled with increased buying by foreign institutional investors, pushed key benchmark indices up by nearly 1.5%. Bulls seem hopeful that the momentum might continue.
While global markets showed strength the previous day, Asian markets opened weaker. Japan’s GDP data came in below expectations, adding to the subdued mood across the region.
Back in the US, a proposed tax bill is under consideration in Congress that suggests a 5% levy on remittances sent by non-US citizens. If approved, it could strain India-US relations. Commerce Minister Piyush Goyal is expected to reach the US on May 17 for trade talks, though an immediate resolution is not anticipated.
Meanwhile, crude oil prices continued their downward trend, but gold prices rebounded after a brief correction.
In derivatives trade, the GIFT Nifty closed at 25,210 on the night of May 16, briefly touching 25,220 in the morning before slipping to 25,170. This hints at a likely positive start for Indian markets.
European markets closed on a strong note. Germany’s support for the US proposal to increase defence spending to 5% helped boost defence-related stocks. The UK posted a 0.7% GDP growth for the first quarter, better than expected, while the Eurozone’s figure was revised slightly lower from 0.4% to 0.3%.
US markets extended gains for the fourth consecutive day, fuelled by tech stocks. Nvidia and Tesla have both rallied 15% this week, while Meta Platforms rose 9%, Amazon 6%, and Alphabet 7%. The Nasdaq Composite is up 6.6% this week, the S&P 500 is up 4.5%, and the Dow Jones Industrial Average is up 2.6%.
The US producer price index fell 0.5% in April, compared to the expected 0.3% drop. This soft inflation print may bolster hopes of a rate cut by the Federal Reserve as early as September.
On May 16, the Dow closed 271.69 points higher (0.65%) at 42,322.75. The S&P 500 gained 24.35 points (0.41%) to settle at 5,916.93, while the Nasdaq dipped slightly by 34.49 points (0.18%) to 19,112.32.
US futures were slightly down in early trade on May 17, with the Dow down 0.04%, the S&P down 0.12%, and the Nasdaq down 0.17%.
Asian markets also opened lower. Japan’s Nikkei slipped early in the session. Hong Kong and Shanghai indices also opened in the red.
In India, markets opened uncertain on May 16 but rallied sharply on foreign fund buying and Trump’s trade comments. Despite Trump claiming that India had agreed to remove tariffs on US products, markets seemed more focused on the broader trade optimism. His disapproval of Apple manufacturing iPhones in India also failed to shake investor confidence. Foreign investors made net purchases worth over ₹5,000 crore.
The Nifty closed above the 25,000 mark for the first time in seven months. After falling to 24,494 during the session, the index rebounded to close slightly lower than the day’s high of 25,116. The Sensex swung between 80,762 and 82,718 during the day.
Shares of Vascon Engineering and Tilaknagar Industries surged over 14% on strong earnings, while Muthoot Finance fell 6.8% due to profit booking despite good results. Cochin Shipyard continued its rally, rising 6.6%. Fertiliser companies, including FACT, were up by nearly 4%.
The Nifty gained 395.20 points (1.60%) to close at 25,062.10. The Sensex added 1,200.18 points (1.48%) to finish at 82,530.74. The Bank Nifty rose 554.30 points (1.01%) to 55,355.60. The Nifty Midcap 100 index advanced 394.45 points (0.70%) to 56,530.85, while the Nifty Smallcap 100 index climbed 92.50 points (0.54%) to end at 17,239.95.
Market breadth remained positive with 2,615 stocks advancing and 1,350 declining on the BSE. On the NSE, 1,980 stocks gained, while 890 fell.
Sixty stocks on the NSE touched their 52-week highs, while only 11 reached new lows. As many as 175 stocks hit the upper circuit, while 27 stocks were locked in the lower circuit.
Foreign institutional investors bought shares worth ₹5,392.94 crore on May 16, while domestic institutions sold stocks worth ₹1,668.47 crore.
With the Nifty crossing 25,000, traders are eyeing the 25,300–25,500 zone as the next resistance range. On the downside, support levels are seen at 24,650 and 24,500. Resistance may be encountered around 25,125 and 25,270.
The Trump administration’s new tax bill suggests a 5% tax on funds sent by non-US citizens to their home countries. This could significantly impact India, which receives around $12 billion annually from the US—roughly 30% of its total remittance inflow. Such a move may affect India’s current account and disrupt household budgets.
India’s trade deficit widened again in April. While exports rose due to US tariff fears, imports from China surged—an unsustainable scenario if the trend continues.
A lower-than-expected US wholesale inflation figure and a softening dollar lifted gold prices. The subdued inflation has strengthened expectations of a potential interest rate cut in September.
Gold rose by $63.40 to close at $3,241.50 per ounce. However, it slipped slightly to $3,227 in early trade on May 17. In Kerala, the price of one sovereign fell by ₹1,560 to ₹68,880 on May 16 but is likely to rise again.
Silver also rallied to $32.64 per ounce.
Base metals saw declines on Thursday. Copper fell 1.16% to $9,537.35 per tonne. Aluminium dropped 1.41% to $2,489.00 per tonne. Tin, zinc, nickel, and lead were also lower.
In global agricultural markets, rubber prices declined 1.02% to $1.7540 per kilogram. Cocoa rose 6.80% to $10,564.15, coffee gained 2.30%, while palm oil dropped 1.61%.
The dollar index remained choppy, moving between 100.59 and 101.06 before settling at 100.88 on May 16. In early trading on May 17, it was at 100.67.
The euro rose to $1.1203, the pound to $1.3313, and the Japanese yen touched 145.18 per dollar.
The Indian rupee started and closed lower, ending at ₹85.55 per dollar—28 paise down.
China’s yuan remained stable at 7.21 per dollar.
Trump reiterated the possibility of a renewed nuclear deal with Iran, which, along with expected output increases from Saudi Arabia and others next month, pushed crude prices lower. Brent crude dropped 2% to close at $64.53 per barrel. In early trade on May 17, Brent was at $64.54, WTI at $61.66, and Murban crude at $63.96.
Cryptocurrencies continue to trade sideways. Bitcoin remained just below $104,000, while Ethereum (Ether) stood at $2,545. Markets await clearer signals before committing further.
