At close, the Sensex was up 1,397 points or 1.8 percent at 78,583, and the Nifty was up 378 points or 1.6 percent at 23,739. About 2,426 shares advanced, 1,349 shares declined, and 144 shares were unchanged.With Sensex and Nifty still 10 percent below their all-time highs, analysts do not foresee a deep correction but expect a sideways or time-wise consolidation in the coming months.
On February 1, Trump triggered fresh trade fears by imposing 25 percent tariffs on Canada and Mexico and slapping a 10 percent levy on Chinese goods, citing illegal immigration and the drug trade as justifications. But by February 3, he softened his stance, granting a 30-day reprieve for Mexico and Canada in exchange for stronger commitments on border security and crime enforcement. However, tariffs on China remain locked in, set to take effect within hours.
"The markets should settle down unless another statement comes (from Trump) that unsettles them," Amish Shah, Research Analyst at Taurus Corporate Advisory Services told Moneycontrol. "Right now, there is volatility across global equity markets due to inconsistent statements from Trump." Shah said if the tariff issue is resolved, the market direction will then depend on corporate earnings.
China wasted no time retaliating, imposing fresh tariffs on certain U.S. imports. U.S. crude prices dropped nearly 2 percent as new tariffs on China took effect, with West Texas Intermediate (WTI) down 1.8 percent and Brent futures falling 1.2 percent.
In the global market, Asian tech stocks climbed today after Trump paused tariffs on Mexico for a month and postponed duties on Canadian exports. Gains were broad-based across Japan, South Korea, and Hong Kong, mirroring a late recovery in US tech stocks on February 3 following the tariff reprieve.
Meanwhile, European stocks opened lower today as investors kept a close eye on developments in US trade policy under Trump. The pan-European Stoxx 600 was down 0.6 percent with most sectors trading below the flatline.
Back in India, the rally was broad-based, with 12 of the 13 sectoral indices holding steady in the green throughout the session. The lone exception? Nifty FMCG, which slipped 0.5 percent, taking a breather after last week's strong gains. The sector, which had surged on hopes of a middle-class consumption boost following the Union Budget's tax relief—effectively making income up to Rs 12.75 lakh tax-free—saw some profit booking. Britannia, Godrej, and Nestle led the decline, dragging the index lower.
Nifty Oil & Gas index rose over 2 percent led by gains in RIL, ONGC, and Indian Oil. ONGC shares rose nearly 2 percent as brokerages flagged strong production growth as a catalyst for improved earnings. The stock had slipped 5 percent over the past two sessions after disappointing December-quarter profit numbers.
In the broader market, the BSE Midcap and BSE Smallcap indices lagged behind the benchmarks, rising over 1 percent each.
Shriram Finance, L&T, Bharat Electronics, Adani Ports, and IndusInd Bank led the charge on the Nifty 50, climbing 3-6 percent. On the flip side, Trent, Britannia, Hero MotoCorp, Nestle, and Tata Consumer struggled, shedding 0.7-6 percent.
Amongst other individual stocks, shares of Gland Pharma fell 5 percent after the stock received downgrades and price target cuts following another disappointing quarter in December. Godrej Properties climbed over 3 percent after stating it is on track to exceed its FY25 bookings guidance of Rs 27,000 crore.
Vodafone Idea shares rose over 3 percent after Finance Secretary Tuhin Kanta Pandey told CNBC-TV18 that the Centre is still considering a decision on Adjusted Gross Revenue (AGR) dues, suggesting that the proposal is still under review. Shares of Castrol India jumped over 6 percent after the company announced a 12 percent year-on-year rise in net profit to Rs 271 crore for the quarter which ended on December 31, 2024.
Kajaria Ceramics slipped over 2 percent after reporting a 25 percent year-on-year drop in net profit to Rs 77.7 crore for Q3 FY25, down from Rs 104.2 crore a year ago.
Coming to technicals, Santosh Meena, Senior Research Aanlyst at Swastika Investmart said, "The good part is that Nifty and Bank Nifty, after an initial dip in the previous session, managed to hold important moving averages and support levels like the 20-day and 50-day moving averages." On an immediate basis, he expects Nifty 50 to head towards 23,800 or even 24,000.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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