Sensex at day's high, Nifty above 22,650 amid cooling volatility, broad-based buying across sectors

Market experts advised investors to maintain a cautious stance in the short term

Benchmark indices Sensex and Nifty extended gains as much as 2 percent at day's high during the afternoon session on April 8, buoyed by optimistic global cues and widespread buying across various sectors. Both the midcap and smallcap indices lent support to the bullish sentiment, which returned to Dalal Street just a day after markets were rattled by a tariff-induced selloff.

Around midday, Sensex climbed 1,669 points or 2.2 percent to scale to day's high of 74,806, while Nifty surged 505 points or 2.2 percent to day's high of 22,666. Market breadth remained decisively positive, with approximately 2,769 stocks advancing, 596 declining, and 104 remaining unchanged.

India’s volatility index, India VIX—often referred to as the "fear gauge"—also cooled down significantly, dropping by 9 percent to hover around the 20 mark. This came after a dramatic spike the previous day, when the index surged by as much as 60 percent to hit a five-year high.

The moderation in VIX suggested a reduction in fear and panic among investors, supported by a more stable global backdrop. Asian markets registered gains, the selloff in US equities remained relatively mild, and crude oil prices rebounded following a sharp correction.

All sectoral indices traded in the green, with the Nifty IT index leading the charge after having endured a steep 8 percent decline over the past five trading sessions. Major tech stocks such as TCS, Infosys, HCL Tech, and Wipro gained up to 4 percent in the afternoon session as the sector gears up to begin releasing its financial results for the March-ended quarter in two days.

Following the IT sector, notable gains were also seen in the Nifty Realty, Nifty Pharma, and Bank Nifty indices, advancing by up to 2 percent.

Despite the rebound, several market experts advised investors to maintain a cautious stance in the short term, citing continued uncertainty stemming from tariff-related tensions.

In the latest development, China’s Commerce Ministry issued a sharp response to US President Donald Trump’s renewed threat to raise tariffs on Chinese imports to as much as 50 percent. This came just a day after Beijing imposed retaliatory tariffs of 34 percent on American goods.

Chetan Ahya, Chief Asia Economist at Morgan Stanley, remarked that India is unlikely to remain immune to the global slowdown triggered by escalating tariff wars. Speaking to CNBC-TV18, he stated, "India could face a 40 to 50 basis point downside in GDP growth as a consequence of ongoing tariff tensions."

In a similar vein, Kenneth Andrade of Old Bridge AMC, during a conversation with CNBC-TV18, emphasised that India must reassess its tariff policies while continuing its trajectory of economic progress. He noted that the worst phase of market volatility seems to have passed, with overvaluation and speculative bubbles having largely deflated and normalized.

According to Andrade, this correction in valuations paves the way for long-term investors to operate in a more stable environment, with the potential for consistent annual returns of around 12 percent. However, he added a note of caution, pointing out that while financial stocks appear attractively valued, deep value opportunities across the broader market remain limited, and some operational headwinds persist.