Nifty 50 reclaims 22,500, Sensex rises on open amid strong global cues; auto, pharma stocks drive gains

Nifty and Sensex saw heavy selling pressure last week as negativity surrounding Trump's tariff threats weighed on sentiment.

Headline indices Nifty 50 and Sensex kicked off the week's first trading session with gains, rising half a percent each during the opening trade on March 17, as strong global cues favoured the domestic bulls.

At 09:27 am, the Sensex was up 408.00 points or 0.55 percent at 74,236.91, and the Nifty was up 134.50 points or 0.60 percent at 22,531.70. About 1964 shares advanced, 995 shares declined, and 172 shares unchanged.

The frontlines underperformed the broader markets, as the Nifty Midcap 100 and Nifty Smallcap 100 traded higher by around 0.8 percent each.

Most sectoral indices also traded with gains, with BFSI counters leading the optimism. The Nifty Auto and Nifty Pharma index surged over one percent respectively, as investors bought into the beaten down counters. M&M, TVS Motors, Granules India and Natco Pharma shares were among the top winners on the indices.

On the flip side, the Nifty Realty and Nifty IT stocks indices saw continued pessimism, as investors offloaded their holdings in index constituents.

The volatility gauge, known as the India VIX, spiked sharply, jumping almost 5 percent to hover close to the 14 mark.

On Friday, Wall Street rallied sharply as investors went bottom-fishing, looking for fundamentally positive stocks that were battered by the sharp sell-off. A broad-based rally boosted the S&P 500, Dow Jones and Nasdaq Compositive, with the tech-related megacaps enjoying a comeback. Every one of the so-called Magnificent 7 artificial intelligence-related momentum stocks advanced, although six of them remain down on the year.

Further, Asian equities were also trading higher during the Monday morning session, rising after China pledged more steps to revive consumption.

"A bullish trend is expected if Trump backs off from tariffs. Key drivers include a 675-point surge in Dow Jones, cooling inflation data in the US and India, and the possibility of rate cuts by the Federal Reserve and RBI," said Prashanth Tapse, Senior VP (Research), Mehta Equities.

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Over the previous week, the indices suffered under heavy selling pressure, with as negativity surrounding Trump's tariff threats offset the optimism on cooling inflation in both, US and India.

Investors have been closely monitoring inflation trends, particularly amid concerns that Trump’s tariff plans could drive up persistent price pressures. Such an outcome might compel the US Federal Reserve to keep interest rates elevated for an extended period, potentially dampening economic growth.

Over the last five trading sessions, Nifty has oscillated within the range of 22,314 to 22,676. According to experts, the Nifty needs to overcome the resistance at 22,700 in the coming days to target an immediate goal of 23,000 to regain bullish momentum.

Going ahead too, with the absence of domestic factors, traders and investors are likely to look towards global developments for triggers. "Investors will be scrutinizing the US Federal Bank, Bank of Japan and Bank of England policy meetings next week more closely than ever amongst growth concerns and increasing recession fears," said Devarsh Vakil, Head of Prime Research, HDFC Securities.

The U.S. central bank is widely expected to hold interest rates steady on Wednesday, but investors are anticipating cuts later in the year and will be looking for signs the Fed may be preparing to move.

However, with April 2, 2025, date for the implementation of reciprocal tariffs from the US inching closer, the uncertainty surrounding the tariffs will certainly weigh on markets. "India dubbed the ‘tariff King’ and ‘tariff abuser’ is unlikely to be spared by Trump. This will keep the market jittery, particularly the export oriented sectors will be anxious about the tariff announcements. Domestic consumption themes unaffected by tariffs will be stable," stated V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Shares of private lender IndusInd Bank Ltd. jumped over three percent on March 17 as the Reserve Bank of India (RBI) issued a statement addressing speculation regarding IndusInd Bank Ltd, stating that the bank remains "well-capitalised and the financially position remains satisfactory".

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