Mumbai: Equity benchmark indices Sensex and Nifty rebounded sharply in early trade Tuesday, mirroring a recovery in Asian markets after US President Donald Trump delayed tariffs on Mexico and Canada for a month.
The Trump administration’s move to impose tariffs on Canada, Mexico and China had sparked trade war fears, leading to a market downturn Monday.
“US President Donald Trump has delayed tariffs on Mexico and Canada for a month,” said Vikas Jain, head of research at Reliance Securities. “This move, along with a cooling trade war, strong domestic manufacturing PMI data, and the finance minister’s announcement in the Union Budget—especially the zero tax up to Rs 12 lakh under the new tax regime—has likely boosted market sentiment.”
Saturday, the White House announced that Trump was implementing an additional 25% tariff on imports from Canada and Mexico and a 10% tariff on imports from China.
The 30-share BSE benchmark Sensex jumped 552.6 points to 77,739.34 in early trade, while the NSE Nifty rose 173.15 points to 23,534.20.
Among the 30-share blue-chip pack, Infosys, Tata Motors, Larsen & Toubro, Mahindra & Mahindra, Adani Ports, State Bank of India, ICICI Bank and Tata Steel were the top gainers. Power Grid, Hindustan Unilever, Nestlé and Asian Paints were among the laggards.
“The decline in the dollar index to 108 is a positive development. Emboldened by the excellent Budget, investors, especially domestic institutional investors, are likely to step up investment, particularly in discretionary consumption segments,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Asian markets in Seoul, Tokyo and Hong Kong also rebounded and were trading higher.
US markets closed lower Monday.
Foreign institutional investors offloaded equities worth Rs 3,958.37 crore Monday, according to exchange data.
Global oil benchmark Brent crude slipped 0.50% to $75.58 a barrel.
The BSE Sensex declined 319.22 points, or 0.41%, to close at 77,186.74 Monday, snapping a five-day rally. The Nifty fell 121.10 points, or 0.52%, to 23,361.05.
PTI
