Indian equity benchmarks began the week on a strong footing on Monday, supported by firm buying in banking and services stocks and positive cues from Asian markets, even as analysts cautioned that the upmove may remain limited to a relief rally.
The BSE Sensex closed the session near 83,300, soaring close to 500 points, while the NSE Nifty50 ended trading above 25,700, jumping nearly 150 points, as of 3:30 PM. Notably, both benchmarks opened today’s trade in green, with Sensex nearing 83,400 and Nifty crossing 25,750, in early hour. The rally in domestic equities mirrored broader strength in Asian markets, where investor sentiment improved following key developments in the United States.
On the BSE benchmark, Adani Ports, Kotak Mahindra Bank, UltraTech Cement, Axis Bank, and HUL settled among the gainers. Meanwhile, the laggards included Infosys, Tech M, Trent, HCL Tech, and Bajaj Finserv.
In the broader markets, the Nifty Financial Services climbed 0.87 per cent, while the Midcap50 fell 0.83 per cent. Sectorally, the Midsmall IT & Telecom and IT indices took a hit of 1.50 per cent and 1.42 per cent respectively. On the other hand, the PSU Bank index climbed 1.36 per cent.
US Supreme Court Verdict Alters Trade Narrative
Market participants reacted positively to the US Supreme Court’s ruling that declared President Donald Trump’s tariff measures illegal, a decision seen as potentially reshaping global trade dynamics.
“The Trump tariff tale has become murkier after the US Supreme Court declared the tariffs illegal. The SC judgement is, indeed, a landmark decision which will seriously impact Trump’s tariff weaponisation strategy,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.
He pointed out that even the new 15 per cent global tariff imposed under Section 122 is likely to face legal challenges. According to him, the probability of this decision being annulled is high, as Section 122 permits tariff imposition only in the event of a serious balance of payments crisis, a condition that does not currently apply to the US.
Vijayakumar added that India has already postponed the visit of its trade negotiating team to the US in view of the evolving situation, calling the move appropriate given the uncertainty.
“From the market perspective, the US SC decision is indeed a positive, but this is not sufficient to trigger a sustained rally in the market. The market will see only a relief rally, which is unlikely to sustain. The market will respond only to the fundamentals, which are fortunately improving,” he said.
Institutional Flows And Oil Prices
On the institutional front, Foreign Institutional Investors (FIIs) remained net sellers on Friday, offloading equities worth Rs 934.61 crore, according to exchange data. Domestic Institutional Investors (DIIs), however, provided support by purchasing shares worth Rs 2,637.15 crore.
Kaynat Chainwala, AVP Commodity Research, Kotak Securities, explained, “WTI Crude oil prices are trading below $66/bbl, down more than 1 per cent from last week’s close, as renewed optimism over a possible Iran nuclear agreement weighed on geopolitical risk premiums. Oil prices may trade in a range ahead of a third round of US-Iran nuclear talks scheduled for Thursday, while concerns over the future of US trade agreements cloud the outlook for global growth and fuel demand.
In the previous session on Friday, the Sensex gained 316.57 points to close at 82,814.71, while the Nifty rose 116.90 points to settle at 25,571.25.
