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The Indian stock market experienced a day of mixed fortunes, with the Sensex and Nifty initially showing promise before succumbing to selling pressure. This occurred despite positive trends in Asian markets, spurred by a U.S. federal court's decision to block President Donald Trump's proposed tariffs on imports from various countries. While Asian indices like the Nikkei, Hang Seng, Shanghai Composite, and Kospi all registered significant gains, the Indian markets presented a contrasting picture, leading to questions about the underlying factors influencing domestic market sentiment. The article identifies two primary reasons for this divergence: monthly expiry considerations and the limited impact of the Trump tariff verdict on India. Rajesh Palviya from Axis Securities attributed the market's retreat to selling pressure related to the monthly expiry of futures and options contracts. He noted adjustments and call writing activities contributing to the decline. However, he maintained a positive outlook, suggesting that the broader trend remains upward and that the market is likely to recover in subsequent sessions. He also pointed out that while the main indices were subdued, there was still activity in the mid and small-cap segments, indicating underlying strength in certain areas of the market. Nilesh Jain from Centrum Broking echoed Palviya's sentiment, emphasizing that the Indian markets have been in a consolidation phase for the past few sessions. He also identified the monthly expiry as a key driver behind the day's lackluster performance and reaffirmed the long-term positive trend for the Indian stock market.
The article further explores the muted impact of the U.S. federal court's decision on Trump's tariffs. Ajit Mishra from Religare Broking explained that India was comparatively less affected by the tariffs than its Asian counterparts from the beginning. The higher tariff rates were primarily imposed on other countries, minimizing the direct impact on Indian exports. Additionally, positive developments in trade discussions between India and the U.S. helped alleviate concerns about a significant blow to Indian exports to the U.S. Aamar Deo Singh from Angel One added that the Indian markets are currently in a consolidation phase and that the U.S. federal court's decision would have a limited overall impact on India. He also highlighted that India still needs to develop its manufacturing capabilities to become a major exporter. This suggests that the Indian market's reaction to the tariff news was tempered by the understanding that its direct exposure was limited and that long-term growth depends on building domestic manufacturing capacity. The metal sector stood out as a positive performer on the D-Street, with the Nifty Metal index rising significantly. Welspun emerged as the top gainer, driven by strong Q4FY25 results that showed a substantial surge in net profit. Other metal stocks, including Lloyds Metals And Energy, Jindal Stainless, Hindustan Zinc, Jindal Steel & Power, Tata Steel, NMDC, Hindustan Copper, Steel Authority of India (SAIL), JSW Steel, Adani Enterprises, National Aluminium Company (NALCO) and Hindalco Industries, also experienced gains, indicating overall strength in the sector. SAIL also reported its earnings on Wednesday, showing an 11% growth in its Q4 PAT, further contributing to the positive sentiment in the metal industry.
The article provides context regarding the U.S. court ruling. A three-judge panel of the US Court of International Trade determined that Trump exceeded his authority when invoking the 1977 International Emergency Economic Powers Act to justify the sweeping tariffs. These tariffs had previously disrupted global commerce, rattled financial markets, and increased the risk of higher prices and recession in the United States and around the world. By overturning these tariffs, the court aimed to restore stability to the global trade landscape. However, as the article illustrates, the immediate impact of this ruling on the Indian market was subdued due to other overriding factors like monthly expiry and perceived limited direct impact. In conclusion, the Indian stock market's performance on the day was a complex interplay of factors. While positive news from Asian markets, fueled by the U.S. court's decision on tariffs, initially provided a boost, selling pressure related to monthly expiry weighed down the indices. The limited direct impact of the tariffs on India and the ongoing consolidation phase further contributed to the market's lackluster performance. Despite the overall subdued sentiment, the metal sector emerged as a bright spot, with several stocks registering significant gains. The article also underscores the importance of domestic manufacturing capabilities for India's long-term growth and its resilience to global trade fluctuations. Ultimately, the day's trading highlights the nuanced dynamics of the Indian stock market and the various internal and external factors that influence its performance.
Source: Sensex, Nifty struggle despite Asian gains. Here's why Trump tariff verdict fails to lift mood