Indian benchmark indices started the session on March 5 on a mildly positive note but managed to extend early gains, breaking away from the first-ever 10-day losing streak for the Nifty. Analysts were hoping to see a rebound making its way as the benchmark, especially after the Nifty staged a recovery from its strong support of 22,000, which it breached for the first since June 2024 in the last session.
Rupak De, Senior Technical Analyst at LKP Securities believes that although market sentiment has not yet turned positive, there are signs that the Nifty is finding support in the 21,800–22,000 zone. In the short term, he anticipates a recovery, but feels any decisive fall below 21,800 could change the current equation.
At 11.24 am, the Sensex surged 598.64 points or 0.82 percent to 73,588.57, while the Nifty climbed 202.70 points or 0.92 percent to 22,285.35. Market breadth remained strong, with 2,858 stocks advancing, 567 declining, and 96 remaining unchanged.
Regardless, investors would still remain hooked on to see if the market manages to hold on to its recovery or will a sell-on-rise sentiment soon kick in. Global markets have been caught amidst a wave of fears over a multi-front global trade war as the US unleashes a thread of tariffs against trade partners. With tariffs against China, Canada and Mexico already imposed, Trump's latest threat on retaliatory taxes came as a key concern for India, another source of caution for investors.
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"India charges us auto tariffs of 100 percent. The system is not fair to US, it never was. On April 2, reciprocal tariffs kick in and whatever they tariff us, other countries, we will tariff them. Whatever they tax us, we will tax them," said Trump during his address to the Joint Session of the Congress.
Meanwhile, Trump's tariffs have also been met with retaliation from other nations, with Canada and China already announcing reciprocal tariffs, and Mexico hinting at soon following in on the trend. Concerns around Trump's tariffs have sent shockwaves across financial markets in recent times and has turned out to be the single biggest trigger weighing on investor sentiment.
"Uncertainty unleashed by Trump tariffs is reigning supreme now and this is weighing on markets. Consequently trading volumes have dipped sharply," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. However, Vijaykumar further stated that the market decline to lower levels due to low volumes doesn’t indicate a sustained downtrend and feels that in the ongoing chaotic scenario, a lack of new developments can trigger market moves.
As for now though, Vijayakumar believes it will be better for investors to wait and watch for the events to unfold. Devarsh Vakil, head of retail research at HDFC Securities also offered a slightly optimistic view over the market, anticipating to see a bottom in the near-term.
The broader markets also declined, with the BSE Smallcap slipping 0.8 percent and the BSE Midcap shedding 1.2 percent. The small- and mid-cap indices officially entered bear market territory in February, falling over 20 percent from their record highs.
Meanwhile, the broader markets staged a stronger comeback, extending the gains seen in the previous session. The BSE Smallcap and BSE Midcap indices rose close to 2 percent each, outperforming their large cap peers.
On the sectoral front, all 13 major sectoral indices glimmered in the green, with Nifty IT leading the gain with its over 2 percent after it recovered from the sharp fall in the last session. Other prominent gainers were Nifty Auto, Nifty PSU Bank and Nifty Metal, surging 1.5-2 percent.
Among Nifty 50 constituents, Tata Steel, HCLTech, BPCL, M&M and NTPC were the biggest gainers, rising 2-3 percent. On the other hand, Bajaj twins--Bajaj Finance and Bajaj Finserv were the worst hit, falling 1-3 percent.
As for prominent names, shares of BSE sank 9 percent after its rival, the National Stock Exchange shifted its expiry day for all F&O contracts to Monday, from the earlier Thursday expiry. All Nifty index weekly futures and options (F&O) contracts will expire on Monday instead of Thursday with effect from April 4. All Nifty F&O contracts to expire last Monday of expiry month, not Thursday, said the exchange.
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