© The Indian Express Pvt Ltd
Tags:
Journalism of Courage
Domestic stock markets rallied over 2 per cent on Tuesday on increase in investors’ risk appetite supported by optimism that US President Donald Trump may soften his stance of tariffs announced on April 2.
The BSE’s 30-share Sensex surged 2.1 per cent, or 1,577.63 points, to close at 76,734.89. The broader Nifty 50 rallied 2.19 per cent, or 500 points, to finish at 23,328.55.
Major Asian indices also gained on Tuesday, with Japan’s Nikkei 225 rising 0.89 per cent and Hong Kong’s Hang Seng climbing 0.23 per cent, and South Korea’s Kospi up 0.88 per cent.
Last week, the US administration announced exemptions on tariffs on certain electronic products. Trump was considering a temporary halt on the auto tariffs he had imposed earlier on the sector, to allow car manufacturers time to adjust their supply chains.
“Markets began the holiday-shortened week on a strong note, gaining over 2 per cent, supported by positive global cues. The rally was driven by optimism around the deferral of tariffs and the recent exemptions on select products, raising hopes for potential negotiations that could ease the overall impact on global trade,” said Ajit Mishra – SVP, research, Religare Broking Ltd.
Buoyancy across global equity markets provided major support to local benchmarks as recent developments suggest that there could be some solutions to the ongoing tariff war over next few weeks, said Prashanth Tapse, senior VP (research), Mehta Equities Ltd. However, falling crude oil prices and strong FII fund outflows continue to create a lot of uncertainty among the investors, leading to fears that falling demand could fuel recession in key economies, he said.
All broader market indices ended in green, with the Nifty Midcap 100 rising 2.92 per cent and Nifty Smallcap 100 gaining 3.08 per cent. All major sectors contributed to the rally in the market. The Nifty Auto ended 3.39 per cent up, Nifty Metal rose 3.2 per cent and Nifty IT gained up 1.63 per cent.
The NSE companies that gained the most included IndusInd Bank (6.67 per cent), Shriram Finance (5.17 per cent), Tata Motors (4.61 per cent) and Larsen & Toubro (4.59 per cent).
“Investors have to understand that the uncertainty triggered by Trump is very much alive and, perhaps, more uncertainty is likely to come with sectoral tariffs, which Trump has declared are going to come,” said VK Vijayakumar, chief investment strategist, Geojit Investments Ltd.
The Indian pharmaceutical sector may again come under pressure from this renewed threat. Even though the bond market has reined-in Trump who was on a rampage, he is unlikely to backtrack on tariffs, he said.
