Experts say markets realise Union Budget benefits and view Trump tariffs as bargaining tools; foreign investors return to India after 23 consecutive selling sessions
India market indices Sensex and Nifty gained on Wednesday morning trade, after foreign institutional investors (FIIs) turned around after weeks of selling, buying a net of Rs 809.23 crore worth of equities on Tuesday.
Stock market experts and analysts stated that the tariffs imposed by US President Donald Trump on certain geographies are being viewed by the market as mere negotiating tools and not an action that would lead to a full-blown trade war.
Another factor was the latest Union Budget presented by Finance Minister Nirmala Sitharaman on February 1, 2025. "The potential beneficial impact of the game-changing Budget is slowly sinking in the market," said V.K. Vijayakumar of Geojit Financial Services.
FIIs turned sellers on Tuesday after 23 back-to-back sessions of heavy selling, sending the BSE Sensex 1.81 per cent up to 78,583.81 and the Nifty 1.62 per cent higher to 23,739.25 at close, breaching January 3 levels.
The momentum continued on Wednesday morning, with the Sensex gaining more than 151 points to 78,735.41 and the Nifty by over 68 points to 23,807.30.
Gainers in the 30-pack Sensex included Infosys, NTPC, Power Grid, Tata Motors, Zomato, and IndusInd Bank.
Despite the positive sentiment, Asian Paints got punished after posting a 23.5 per cent decline in consolidated quarterly net profit of Rs 1,128.43 crore.
The stock fell at least 5 per cent in the early trading session, on lacklustre results that the company attributed to "muted demand conditions coupled with downtrading, and a weak festive season".
Other losers included Nestle, Titan, Mahindra & Mahindra, and Sun Pharma.
Despite recovering 4 paise from its all-time low level to close at 87.07 against the US dollar, the Indian currency fell 9 paise to 87.16 in early Wednesday trade.
Forex investors remained cautious ahead of the fallout of Trump tariffs and the results of the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting this week.
The MPC is set to kick off its three-day-long deliberations on Wednesday, February 5, with newly-appointed RBI Governor Sanjay Malhotra chairing for the first time.
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