The Sensex and Nifty extended early gains and were up by a percent around noon on February 4 following the U.S. President Donald Trump's decision to pause its planned tariffs on Canada and Mexico. This move eased fears of a global trade war. Domestically, all eyes are now on the RBI's policy decision on February 7.
By 12.35 PM, Sensex had gained 800 points, or 1 percent, reaching 77,994, while Nifty climbed 230 points, or 1 percent to 23,593.
"The decision taken by Trump to temporarily freeze the tariffs on Mexico and Canada and start negotiations is a clear indication of President Trump’s strategy," said V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services. "That is, impose tariffs and then negotiate and strike a deal. The same strategy is likely to be tried with China, too. It is important to understand that a full-blown trade war will be damaging for the US,too."
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When it comes to sectoral indices, except Nifty FMCG which was down 0.2 percent, the remaining 12 domestic sectors were in the green.
The metal index rose over a percent, recovering from a 3 percent dip in the previous two sessions, triggered by the strength of the U.S. dollar and tariff concerns.
Rate-sensitive sectors like auto and real estate gained half a percent each continuing to benefit from expectations of increased spending post-tax cuts and hopes for an interest rate reduction later in the week.
Tata Motors, Larsen & Toubro, Bharat Electronics, Shriram Finance, and Cipla led the gains on Nifty 50, climbing 2-4 percent. Meanwhile, Titan, Hero MotoCorp, Britannia, ITC, and Trent were the biggest laggards, slipping 1-7 percent.
Also Read | China imposes counter-tariffs on US imports, launches anti-trust probe against Google
Vodafone Idea shares rose nearly 3 percent after Finance Secretary Tuhin Kanta Pandey told CNBC-TV18 that the Centre is still considering a decision on Adjusted Gross Revenue (AGR) dues, suggesting that the proposal is still under review.
The shares of Castrol India jumped over 5 percent after the company announced a 12 percent year-on-year rise in net profit to Rs 271 crore for the quarter which ended on December 31, 2024.
In the broader market, the BSE Smallcap index rose by 0.4 percent, while the BSE Midcap index outperformed with a gain of 0.8 percent.
Hardik Matalia, Derivative Analyst at Choice Broking expects 23,700 to act as a critical hurdle. "A sustained close above this resistance level could push the markets beyond the 24,000 mark." "On the downside, 23,200 serves as an immediate support level, followed by 23,000," he added.
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