SENTIMENT | Undertone bullish as macros remain sound

FPJ News Service mumbai

Markets continued to rally for the third straight session on Wednesday, boosted by fresh foreign fund inflows and sound domestic macro fundamentals. The fall in retail inflation (nearly six-year low) raised hopes of further bank rate cuts, and a big boost in spending and investor confidence.

“Is it calm before the next storm? Should we book some profits in the calm before the next potential storm arrives?” asks a high-net worth individual investor. “We must get it done, before the next one arrives, it could be a cyclone, and book some profits in the current calm undertone,” he added.

The 30-share BSE Sensex climbed 309.40 points to settle at a two-week high of 77,044.29 in a volatile session. The NSE Nifty increased by 108.65 points to 23,437.20. IndusInd Bank jumped 7.12%. Axis Bank, Adani Ports, Asian Paints, Bharti Airtel, State Bank of India and ITC were among the top gainers.

“Globally, markets are undergoing fresh consolidation as tariff tensions intensify, with the US increasing tariffs to 245% on Chinese goods. Amidst global weakness, the Indian market exhibited a mild positive sentiment in anticipation that the trade fight between the US & China will not harm but benefit India, and March’s CPI inflation which is at a 67-month low is indicative of further rate cuts in the near future. Domestically, the Q4FY25 earnings season has started on a weak note. Overall expectations remain subdued, suggesting potential profit booking at higher levels,” said Vinod Nair, Head of Research, Geojit Investments.

“The market appears positive after the Nifty recouping all the losses caused by Trump’s ‘Liberation Day’ reciprocal tariffs. The market is indicating calm after the storm. But investors should not jump to the conclusion that stability has returned to the market and it is poised for further up moves. Since the trade war between US and China is heating up after China’s latest decision to halt exports of rare earths, and orders for Boeing, more actions, reactions and volatility are on the cards.

“A significant take away from the recent market trend is the resilience of many domestic consumption bluechips. Stocks like Bajaj Finance, Bharti Airtel, Indigo Airlines and Eicher Motors are at 52-week highs,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments.