Sensex settles nearly 500 pts higher, Nifty ends above 25,700 amid US tariff relief; IT caps gains

Sensex up 600 pts, Nifty above 25,750: US Supreme Court order on tariffs among key factors behind market rise

• Sensex and Nifty rose as US Supreme Court struck down tariffs
• Textile stocks gained 2.5%-8% as tariff burden eased
• Adani Ports led Nifty gainers; ONGC was the worst performer

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The benchmark was up 0.58% to 83,294.66, while the broader NSE Nifty 50 index advanced 0.55% to 25,713 on February 23, after the US Supreme Court struck down President Donald Trump's sweeping tariffs, but the gains were capped as persistent concerns over the disruption from AI kept IT shares under pressure.

U.S. Supreme Court on Friday struck down Trump's sweeping tariffs, which he had pursued under a law intended for use in national emergencies, in a ruling with significant implications for global trade and economy.

On Saturday, Trump said that he will raise the temporary tariff on U.S. imports from all countries from 10% to 15%, the maximum allowed under the law.

"The development is a significant positive for export-oriented sectors, as the effective tariff burden eases," said Sudeep Shah, head of technical and derivatives research at SBI Securities.

Textile stocks such as Trident, Welspun Living, Arvind and Kitex Garments gained 2.5%-8%.

"That said, the situation remains fluid. Any fresh statements or alternative tariff actions under different presidential authorities could reintroduce volatility in the near-term," Shah said.

"India's effective tariff rate is now likely to be 11-13%. This compares favorably to China, whose effective rate is likely to be above 15%, while most other Asian peers will have similar effective tariff rates to that of India," Emkay Global Financial Services said.

The broader small-caps rose 0.3%, while mid-caps lost 0.4%.

Thirteen of the 16 major sectors rose with heavy-weight financials and state-owned banks adding 0.9% and 1.4%, respectively.

The IT index lost 1.4%, taking its year-to-date drop to 16.7%. Jefferies downgraded six Indian IT companies, including TCS and Infosys, on concerns about likely structural changes to IT business due to AI tools.

Infosys and Wipro dropped 1.9% each, while Mphasis and Coforge shed 2.7% and 3.9%, respectively.

Adani Ports and Special Economic Zone ended as the top gainer in the index, up nearly 3%. Financial services companies Kotak Mahindra Bank, HDFC Life Insurance Co., SBI Life Insurance Co., Axis Bank, Shriram Finance, and State Bank Of India ended 1-2%. Automobile companies Mahindra & Mahindra, Bajaj Auto, Eicher Motors, Maruti Suzuki India, and Tata Motors Passenger Vehicles ended around 1% higher each.

In contrast, Hindalco Industries ended as the worst hit stock in the Nifty 50 index, down 2%. Information technology companies Infosys, Wipro, Tech Mahindra, and HCL Technologies ended 1-2% lower. Among individual stocks, Eternal, Cipla, Trent, and Oil and Natural Gas Corp. ended around 1% lower each.

IDFC FIRST Bank ended the session as the worst hit stock in both the Nifty 200 and Nifty 500 indices, down over 16%. The stock fell after the bank detected a fraud of around Rs 590 crore in accounts related to the Haryana government.

Shares of UPL fell over 14% and were among the worst hit in both the Nifty 200 and Nifty 500. The stock fell after Nuvama downgraded the stock to 'buy' from 'hold'. The company said Friday that it will restructure business units.

"The Trump tariff tale has become murkier after the US Supreme Court declared the tariffs illegal. The SC judgement is, indeed, a landmark decision which will seriously impact Trump’s tariff weaponisation strategy. Even the new 15 % global tariff imposed under section 122 will be challenged in courts and the probability of this decision getting annulled is high since section 122 allows the US president to impose tariffs to tackle serious Bslance of Payments crisis, and the US doesn’t have a Balance of Payments crisis now.

"India has already delayed the visit of its trade negotiating team to the US in the light of the changed scenario. This is welcome move. From the market perspective the US SC decision is indeed a positive, but this is not sufficient to trigger a sustained rally in the market. The market will see only a relief rally which is unlikely to sustain. The market will respond only to the fundamentals, which are fortunately improving," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Technical view

"The recent wild swings have helped form a flag pattern that projects a vertical rise shortly. However, should we stumble again in the 26200 vicinity, the upside hopes will have to be abandoned. We will go in today on a positive note, but expect upsides to strengthen only once past 25840. Alternatively, inability to float above 25700 could signal loss in upside momentum, but we will wait for a slippage past 25590 to switch sides," said Anand James, Chief Market Strategist, Geojit Investments Limited.