Market participants are closely monitoring increasing trade tensions between the US and China
Benchmark indices opened higher on Wednesday but moderated gains in early trade as banking stocks outperformed while auto companies faced selling pressure. The BSE Sensex traded at 76,840.00, up 105.11 points or 0.14 per cent from its previous close, while the NSE Nifty50 added 38.25 points or 0.16 per cent to trade at 23,366.80 as of 10.04 a.m.
Banking stocks dominated the gainers list with IndusInd Bank leading the pack, rising 2.65 per cent. Retail major Trent surged 2.13 per cent, while Axis Bank added 2.01 per cent. HDFC Life Insurance gained 1.58 per cent, and Jio Financial Services advanced 1.40 per cent.
“The banking sector is showing renewed strength after yesterday’s breakout above the 52,000 level in Bank Nifty, which signals a positive technical setup,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
On the losing side, auto stocks faced pressure with Maruti Suzuki declining 1.53 per cent and Bajaj Auto falling 1.35 per cent. Metal stock Hindalco lost 1.13 per cent, while Eternal dropped 1.11 per cent and Sun Pharma shed 0.94 per cent.
Foreign Institutional Investors (FIIs) turned net buyers for the first time this month on Tuesday, purchasing equities worth ₹6,065 crore, providing a boost to market sentiment. However, Domestic Institutional Investors (DIIs) turned net sellers after three days, offloading equities worth ₹1,951 crore.
“FIIs turning net buyers after nine consecutive days of selling is a positive sign for the market,” noted Hardik Matalia, Derivative Analyst at Choice Broking.
Market participants are closely monitoring increasing trade tensions between the US and China. “The street continues to remain focused on escalating tensions between the US and China, as the US Commerce Department opened an investigation into semiconductor and pharmaceutical imports—raising the prospect of further tariffs,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
The market is finding support from macroeconomic factors, with retail inflation cooling to a nearly six-year low of 3.34 per cent and wholesale inflation falling to a seven-month low of 2.05 per cent. Additionally, the India Meteorological Department (IMD) has forecast an above-normal monsoon at 105 per cent of the long-period average, boosting sentiment for agriculture-related sectors.
“Fertiliser, tractor, and FMCG stocks are likely to see positive momentum, driven by expectations of improved demand following the IMD’s forecast,” according to Vikas Jain, Head of Research at Reliance Securities.
Real estate stocks may benefit following a 25 basis point cut in lending rates by SBI and growing anticipation of further rate cuts by the RBI. The INDIAVIX, which measures market volatility, dropped significantly by 19.81 per cent on Tuesday and currently trades at 16.1250, indicating decreasing market anxiety.
On the technical front, analysts suggest the Nifty has key support at 23,200 followed by 23,100 and 23,000, while resistance is seen at 23,500, 23,600, and 23,800 levels.
“As long as the Bank Nifty remains above 51,800 levels, the bullish sentiment is expected to continue. On the upside, it could retest the range of 52,600 to 53,000,” added Matalia.
Global markets exhibited mixed sentiment, with US stocks ending slightly lower on Tuesday. “US stocks ended slightly lower as tariff uncertainty remained high, shares of consumer and healthcare companies eased, and upbeat bank results provided some support,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.
Investors await US retail sales data and Federal Reserve Chairman’s statement later today for further cues on the economic outlook. The tech sector faced pressure after Nvidia announced that the US government is restricting exports of its H20 chip to China.
Market experts advise a “buy on dips” strategy while maintaining strict risk management given the current market momentum amid ongoing global trade uncertainties.
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Published on April 16, 2025
