Indian benchmark indices The Sensex and Nifty surged in the second half of Tuesday, closing nearly 2 per cent higher after the US paused its planned tariffs on Canada and Mexico, providing temporary relief from escalating trade tensions. The market capitalisation jumped by Rs 5.6 lakh crore today.
With volatility still a concern due to US President Donald Trump’s unpredictable stance, market experts are now turning their attention to the RBI’s policy decision on February 7, as global markets remain cautious.
At the close of trading, the Sensex rose by 1,397 points, or 1.8 per cent, to 78,583, while the Nifty gained 378 points, or 1.6 per cent, reaching 23,739. A total of 2,426 shares advanced, 1,349 shares declined, and 144 shares remained unchanged.
On the BSE Sensex, L&T, Adani Ports, IndusInd Bank, Tata Motors And RIL were the leaders. On the flip side, ITC Hotels, Zomato, Nestle, Maruti Suzuki and Tech M struggled.
With both the Sensex and Nifty still 10 per cent below their all-time highs, analysts do not anticipate a sharp correction but expect a period of sideways movement or time-based consolidation in the coming months.
Sectorial Update
The rally was broad-based, with 12 of the 13 sectoral indices remaining firmly in the green throughout the session. The only exception was Nifty FMCG, which slipped 0.5 per cent, pausing after last week’s strong gains. This sector had surged on the back of expectations for a boost in middle-class consumption following the Union Budget’s tax relief, which effectively made income up to Rs 12.75 lakh tax-free. However, some profit booking was seen, with Britannia, Godrej, and Nestle leading the decline and dragging the index lower.
The Nifty Oil and Gas index rose over 2 per cent, driven by gains in RIL, ONGC, and Indian Oil. ONGC shares climbed nearly 2 per cent as brokerages highlighted strong production growth as a potential catalyst for improved earnings. The stock had fallen 5 per cent over the past two sessions following disappointing December-quarter profit numbers.
Broader Market
In the broader market, the BSE Midcap and BSE Smallcap indices trailed the benchmarks, rising just over 1 per cent each.
Meanwhile, on February 1, President Trump sparked fresh trade concerns by imposing a 25 per cent tariff on Canada and Mexico, as well as a 10 per cent levy on Chinese goods, citing illegal immigration and the drug trade as the reasons. However, by February 3, he eased his position, offering a 30-day reprieve to Mexico and Canada in exchange for stronger commitments on border security and crime enforcement.
