Indian stock markets commenced trading on a positive note on Wednesday, notwithstanding US President Donald Trump's announcement of reciprocal tariffs from April 2. Global markets remained on edge as companies from Japan to Mexico prepared for higher prices, subdued demand, and disruptions to supply chains.
The Bombay Stock Exchange (BSE) Sensex opened 162.63 points higher at 73,152.56, while the broader Nifty 50 gained 52.85 points, starting the session at 22,135.50. Market breadth revealed that 30 Nifty companies advanced, whereas 20 declined, reflecting cautious optimism among investors.
Among the top gainers on the Nifty, Mahindra & Mahindra, Power Grid, HCL Technologies, Bharat Petroleum Corporation Limited (BPCL), and Adani Ports led the rally. Conversely, Bajaj Finance, Bajaj Finserv, SBI Life, HDFC Bank, and Sun Pharmaceutical Industries were the biggest laggards in early trade.
Ajay Bagga, a banking and market expert, remarked, "Trump tariffs impacted global markets on Tuesday, with companies from Japan to Mexico bracing for disruptions, higher prices, and lower demand as business and consumer confidence is hurt by the unpredictable Trump policy regime. This morning, China has announced a fiscal stimulus, proposing a 4 per cent fiscal deficit for 2025 to achieve a 5 per cent GDP growth under challenges to its exports."
Also read: World shares decline as Trump's tarrifs take effect
Bagga further observed that the protectionist measures being implemented were reminiscent of the 1930s, stating, "The tariff actions on friends and foes alike is something not seen since the 1930s protectionism at the height of the Great Depression."
Despite strong domestic economic momentum, Bagga cautioned that global pessimism could weigh on investor sentiment. He said, "For India, there is hope for some kind of an agreement to avoid mutual tariffs with Union Minister Piyush Goyal in the US for discussions. Indian markets will be impacted by the global risk-off, and despite domestic economic momentum picking up, the global pessimism will translate into a cautious market outlook."
Akshay Chinchalkar, Head of Research at Axis Securities, noted that while the Nifty had recovered from initial losses, it remained under pressure. He stated, "The Nifty recovered from its initial weakness to finish slightly lower and, in doing so, ended down for the 10th straight day for the first time in history. There are signs that the broader benchmarks are attempting a recovery, but a trigger is awaited."
Analysts anticipate that global uncertainties will dictate the near-term market trend, particularly with ongoing US-India trade discussions. Investors are closely monitoring policy responses from major economies as they navigate trade disruptions and the economic slowdown triggered by rising protectionism.
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