Mumbai, Feb 4 (PTI) – Indian equity benchmark indices, Sensex and Nifty, made a sharp recovery in early trade on Tuesday, mirroring an uptrend in Asian markets following US President Donald Trump's decision to delay tariffs on Canada and Mexico by a month.
The imposition of additional tariffs on Canada, Mexico, and China had fueled concerns over a potential trade war, leading to a market downturn on Monday. However, the latest decision provided some relief to investors.
Vikas Jain, Head of Research at Reliance Securities, noted that the postponement of tariffs, along with easing trade war concerns, strong domestic manufacturing PMI data, and favorable announcements in the Union Budget—particularly the zero-tax slab up to ₹12 lakh under the new tax regime—contributed to improved market sentiment.
On Saturday, the White House had announced an additional 25% tariff on imports from Canada and Mexico, along with a 10% increase on Chinese imports. The news had triggered sell-offs in global markets.
In early trade, the 30-share BSE Sensex surged by 552.6 points to reach 77,739.34, while the NSE Nifty climbed 173.15 points to 23,534.20. Major gainers among the blue-chip stocks included Infosys, Tata Motors, Larsen & Toubro, Mahindra & Mahindra, Adani Ports, State Bank of India, ICICI Bank, and Tata Steel. On the flip side, Power Grid, Hindustan Unilever, Nestlé, and Asian Paints were among the laggards.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the positive impact of the decline in the dollar index to 108, stating that investors, particularly Domestic Institutional Investors (DIIs), are expected to increase investments, especially in discretionary consumption sectors, following the encouraging Budget.
Asian markets followed suit, with Seoul, Tokyo, and Hong Kong registering gains. Meanwhile, US markets closed lower on Monday amid trade uncertainty.
On the institutional front, Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,958.37 crore on Monday, as per exchange data.
In the commodities market, Brent crude oil prices slipped 0.50% to USD 75.58 per barrel, indicating a slight easing in global crude prices.
The recovery comes after the BSE Sensex fell 319.22 points (0.41%) to close at 77,186.74 on Monday, snapping a five-day winning streak. The Nifty also declined 121.10 points (0.52%) to 23,361.05.
With global cues stabilizing and supportive domestic factors in place, market participants remain optimistic about continued momentum in the coming sessions.
