Markets stage a comeback after $10 trn global quake; Sensex, Nifty gain

India Vix slips 10% as talk of easing tariffs and RBI rate relief lift mood

Markets recovered on Tuesday after a brutal selloff in the previous session, lifted by hopes that global trade tensions may ease. Most global markets bounced back after nearly $10 trillion was wiped out over the past three trading sessions. Bargain hunting and expectations of a rate cut by the Reserve Bank of India (RBI) also supported the rebound.

 

The Sensex rose 1.5 per cent to close at 74,227, while the Nifty 50 gained 1.7 per cent to end at 22,536. Barring Power Grid Corporation of India, all Sensex and Nifty stocks closed in the green.

 

During intraday trade, both indices climbed as much as 2.4 per cent. Tuesday’s session — the strongest for the Nifty in three months and for the Sensex in three weeks — followed a 3 per cent drop on Monday, driven by concerns that US tariffs and the broader trade conflict could tip the US into recession and drag down global growth.

 

The broader market also strengthened, with mid and smallcap indices rising around 2 per cent each. A day after its biggest-ever single-day jump, the India Vix fell 10 per cent to 20.44. 

 

Market breadth improved sharply: 3,092 stocks advanced while 872 declined. The number of stocks hitting 52-week lows dropped to 54 from 775 the day before, while those reaching lower trading limits fell to 184 from 543 on Monday.

 

Most Asian and European markets rose around 2 per cent, while Japanese stocks rallied 6 per cent.

 

“While valuations are going to take a hit, we think the downturn should not affect earnings so much, especially for sectors and companies that generate most of their revenue in their home markets. Weaker growth in the US would affect fundamentals to some extent, but perhaps not as much as markets currently suggest. While tariffs can hurt growth, they can also provide greater impetus for fiscal support to counter the hit,” said Herald van der Linde, head of equity strategy — Asia-Pacific, HSBC, in a note.

 

All BSE sectoral indices ended higher, with most gaining over 2 per cent. Titan Company, Bajaj Finance, and State Bank of India led the Sensex, each rising 3 per cent. The Nifty Bank index climbed 1.3 per cent.

 

“There are some snapback rallies in Asia following the steep fall, but these gains are unlikely to hold if tensions between the US and China escalate further,” said Jaykrishna Gandhi, head of business development, institutional equities, Emkay Global Financial Services.

 

Foreign institutional investors sold shares worth nearly ₹5,000 crore, extending their two-day selling to ₹14,034 crore. Meanwhile, domestic institutional investors bought shares worth ₹3,097 crore. On Monday, they had pumped in ₹12,122 crore — their highest since February 28.

 

The RBI is widely expected to announce a 25-basis-point rate cut on Wednesday, which would bring the repo rate down to 6 per cent.

 

“The market is likely to remain volatile until there’s more clarity on US tariffs. Meanwhile, stock-specific moves will continue, driven by upcoming fourth-quarter earnings and management commentary. We suggest investors avoid globally exposed sectors like information technology, pharmaceutical, and metals, and instead focus on domestic economy-linked stocks, which may offer more stability in the current uncertain environment,” said Siddhartha Khemka, head — research, wealth management, Motilal Oswal Financial Services.