Domestic stock markets rose sharply on Tuesday, with major indices gaining over 1.6% as global market sentiment improved following US President Donald Trump’s decision to delay new tariffs on Canada and Mexico for a month. The announcement helped ease concerns over a potential trade war, driving optimism across global equity markets.
Key Highlights:
- Sensex surged by 1.81% (1,397.07 points), closing at 78,583.81.
- Nifty 50 gained 1.62% (378.16 points), ending at 23,739.25.
- Intra-day trades saw the Sensex rise by 1,471.85 points, and Nifty surged by 401.7 points.
Analyst Insights:
Vinod Nair, Head of Research at Geojit Financial Services, highlighted that the Indian market had struggled with geopolitical risks from the US-China tariff tensions earlier but is now benefiting from a global rebound in sentiment. This shift has sparked a sharp rise in domestic equities.
Market Dynamics:
The rally was triggered after Trump announced that the 25% tariffs on Canada and Mexico, as well as 10% tariffs on China, scheduled to take effect on February 4, would be delayed for a month. Monday’s sell-off had followed Trump’s tariff announcement but was quickly reversed on Tuesday.
Large-cap stocks dominated the market, with the BSE Largecap index rising 1.62%. Notable gainers included:
- Shriram Finance Ltd (5.65%)
- Larsen & Toubro Ltd (4.19%)
- Bharat Electronics Ltd (3.68%)
- IndusInd Bank (3.68%)
- Adani Ports (3.54%)
Technical Analysis:
Rupak De, Senior Technical Analyst at LKP Securities, observed that the Nifty has moved up following a falling wedge pattern retest, suggesting the possibility of a rally in the short term. The index has also sustained above the critical 21EMA (exponential moving average) on the daily timeframe.
Focus on RBI’s Upcoming Policy:
Looking ahead, the market is now turning its attention to the Reserve Bank of India’s (RBI) monetary policy meeting scheduled for February 7. Many economists expect the RBI’s Monetary Policy Committee (MPC) to cut the repo rate by 25 basis points (bps). This has further fueled buying interest in banking stocks, with the Nifty Bank index rising nearly 2%.
Conclusion:
The market’s positive reaction to Trump’s tariff delay, coupled with strong performances from large-cap stocks and anticipation of the RBI’s rate cut, has boosted investor confidence. The market outlook remains optimistic for the near term, with a key focus on the upcoming monetary policy announcement.