Sensex, Nifty defy global cues, stage recovery amid US tariff concerns

Markets, analysts said, will react to the announcement of reciprocal tariffs and the initial response from global markets, which could influence sentiment

Stock market closing bell, Wednesday, April 2, 2025: The domestic market, despite mixed global cues surrounding the impending US tariffs, posted steady gains on Wednesday, April 2. The benchmarks – the Sensex settled 592.93 points, or 0.78 per cent higher at 76,617.44, and the NSE Nifty50 at 23,332.35, up 166.65 points, or 0.72 per cent.

 

From the broader basket, mid- and small-cap shares settled higher by over 1 per cent each. Sectoral markets also settled higher, with Realty shares outperforming others, as the Nifty Realty index ended higher by over 3 per cent. This was followed by Consumer Durables, Banks, and Financial Services, which ended higher by up to 2.51 per cent.

 

This optimism in the Indian equity markets, Vinod Nair, Head of Research at Geojit Investments, said, was largely driven by expectations that the tariffs would have a minimal impact on the domestic economy, given the positive progress in India-US trade negotiations.

 

Notably, 21 out of the 30 constituent stocks of the Sensex settled higher, with gains led by Zomato, Titan, IndusInd Bank, Maruti Suzuki India, and Tech Mahindra, which saw gains of up to 4.75 per cent.

 

"Sentiments were further reinforced by India's manufacturing PMI for March, which reached an eight-month high, hinting at a recovery in Q4FY25 corporate earnings," Nair said.

 

It is, however, worth noting that globally, investors are on edge, awaiting US President Donald Trump's upcoming announcement of reciprocal tariffs today, which he has dubbed "Liberation Day." The White House said that reciprocal tariffs will take effect immediately after Trump announces them at 1:30 AM IST.

 

Markets, according to Ajit Mishra – SVP, research at Religare Broking, will react to the announcement of reciprocal tariffs and the initial response from global markets, which could influence sentiment. Additionally, the scheduled weekly expiry may add to the volatility.

 

"We recommend a cautious stance and favor a hedged approach until there is greater clarity on the index’s next directional move. However, stocks continue to offer trading opportunities on both sides, and participants should position themselves accordingly," Mishra said.

 

Nifty50 suggests potential price recovery in short term

Following a recent correction, the Nifty50 index, according to Rupak De, senior technical analyst at LKP Securities, appears to be finding support around the critical 50 EMA on the daily timeframe. Additionally, the index has been holding above the falling trendline breakout point. A bullish Harami candlestick pattern has formed on the daily chart, suggesting a potential price recovery in the short term.

 

"On the lower end, 23,100 might remain a strong support level in the short term, below which weakness could increase. On the other hand, sustaining above 23,100 might provide momentum for a rally toward 23,800," De said. 

According to Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C Mehta Investment Intermediates, the Nifty50 has formed an inside bar candlestick pattern on the daily chart, indicating strength. On the upside, 23,400 will serve as an immediate hurdle for the index, where the 200-Day Exponential Moving Average (DEMA) is placed.

 

"If the index sustains above 23,400, the rally could extend further towards the 23,600-23,800 levels; otherwise, it may continue consolidating within the 23,000-23,400 range," Yedve said.