Equity markets bounced back strongly Monday morning, with the benchmark the Sensex opening nearly flat at 73,830.03 compared to its previous close of 73,828.91 but has climbed to 74,294.49, gaining 465.58 points or 0.63 per cent. Meanwhile, the Nifty opened lower at 22,353.15 against its previous close of 22,397.20 but has risen to 22,555.60, up by 158.40 points or 0.71 per cent. The positive open follows a robust performance in US markets Friday, where the S&P 500 and Nasdaq posted their best single-day gains of the year.
The market recovery comes amid cooling inflation data and easing concerns over President Trump’s tariff threats that had previously wiped off approximately $7 trillion from global equity markets since February’s peak.
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“The near-term market trend is likely to be stable with a positive bias,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “The positive factors are the steadily declining trend in FII outflows and the outperformance of India over the US last week.”
IndusInd Bank led the gainers on NSE, surging 4.60 per cent to ₹703.25, followed by Dr. Reddy’s (3.42 per cent), M&M (3.13 per cent), SBI Life (3.10 per cent), and Bajaj Finserv (2.62 per cent). On the losing side, Nestle India fell 1.04 per cent, HCL Tech declined 0.98 per cent, BPCL dropped 0.84 per cent, Tech Mahindra lost 0.75 per cent, and Wipro decreased 0.66 per cent.
Market sentiment has improved following recent macroeconomic data showing February’s inflation dropping to 3.61 per cent, well below the projected 3.98 per cent and the RBI’s 4 per cent target, while January’s industrial output surged to 5 per cent, exceeding the 3.5 per cent forecast.
“With inflation now below the RBI’s threshold, markets anticipate an April rate cut, further fuelling positive sentiment,” noted Devarsh Vakil, Head of Prime Research at HDFC Securities.
The US markets’ strong performance on Friday was driven by investors pushing aside growing concerns over the global trade war and buying beaten-down stocks. The Dow Jones Industrial Average surged 675 points, contributing to the positive sentiment in Asian and Indian markets.
“The market is expected to open positively, driven by a global market rally after US indexes gained over 2 per cent, marking one of the biggest single-day increases following the US Presidential election results,” said Vikas Jain, Head of Research at Reliance Securities.
However, analysts caution that trade war concerns continue to loom over markets. “The uncertainty surrounding the reciprocal tariffs kicking in from April 2nd will certainly weigh on markets. India dubbed the ‘tariff King’ and ‘tariff abuser’ is unlikely to be spared by Trump,” warned Dr. Vijayakumar.
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In the commodities market, gold prices made history by surpassing $3,000 per troy ounce for the first time, driven by safe-haven demand amid global economic uncertainties. “Gold surpassed $3,000 per troy ounce for the first time, while silver reached a 4.5-month high, driven by safe-haven demand,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.
Oil prices also rose, opening about 1 per cent higher after the United States vowed to keep attacking Yemen’s Houthis until the group ends its assaults on shipping. “Crude oil prices showed very high volatility and prices fell seventh consecutive week in the international markets amid slower global growth and demand concerns due to the US trade tariffs,” added Kalantri.
Technical analysts suggest the market is exhibiting non-directional activity. “On the lower side, it is consistently finding support near 22300/73300, while profit booking has been witnessed between 22600/74700 and 22650/74900,” said Shrikant Chouhan, Head Equity Research at Kotak Securities.
Investors will be closely watching this week’s Federal Reserve meeting for signals on potential interest rate cuts later in the year. “The U.S. central bank is widely expected to hold interest rates steady on Wednesday, but investors are anticipating cuts later in the year and will be looking for signs the Fed may be preparing to move,” noted Devarsh Vakil.
