Indian Stock Market Opens Higher as US Delays Tariff Hikes on Canada and Mexico
"Indian stock market surges as the US delays tariff hikes on Canada and Mexico. Sensex gains 443 points, Nifty rises 130 points. Read the latest market trends and expert insights."
Mumbai: The Indian stock markets opened on a positive note on Tuesday, rebounding after a two-day decline, as the United States announced a temporary delay in the planned tariff hikes on Canada and Mexico.
This development provided a much-needed boost to investor sentiment, leading to an uptick in both the NSE Nifty 50 and BSE Sensex.
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Stock Market Performance and Key Indices
At 9:32 a.m., the BSE Sensex surged 443 points (0.58%) to reach 77,630.71, while the NSE Nifty 50 climbed 130.25 points (0.56%) to 23,491.30. This positive momentum helped the Indian stock market recover after the previous session’s losses.
On the NSE, 11 out of 12 sectors advanced, indicating broad-based buying interest. The Nifty Metal index emerged as the top performer, while Nifty FMCG lagged behind, making it the worst-performing sector during the market opening.
Among the key stocks influencing Nifty 50 movements:
- Negative Impact: Power Grid Corporation, ITC, Hindustan Unilever, and Asian Paints weighed on the index.
- Positive Impact: Infosys, ICICI Bank, Mahindra & Mahindra, and L&T contributed significantly to the index’s gains.
Market Experts Weigh in on Global Trade Developments
According to market analysts, the recent global sell-off in equities was reversed due to positive trade signals from the US administration. The decision by US President Donald Trump to temporarily halt tariff hikes on Mexico and Canada is seen as a strategic move, reflecting the administration’s approach to trade negotiations.
Vikram Kasat, Head-Advisory at PL Capital-Prabhudas Lilladher, pointed out that over the weekend, Trump enforced 25% duties on Canada and Mexico and a 10% tariff hike on Chinese imports, citing concerns related to migration and fentanyl inflow into the US. However, the temporary freeze on tariffs for North American nations signaled an intent to negotiate, which positively impacted global markets.
Indian Rupee Hits Record Low Amid Trade Uncertainty
Despite positive stock market movements, the Indian rupee weakened beyond Rs 87 per US dollar for the first time on Monday, marking a record low. Currency depreciation was largely attributed to trade tensions and ongoing foreign investor outflows.
Additional 25% tariffs on Mexico and Canada were originally set to go into effect on Tuesday, aimed at curbing the flow of undocumented migrants and illicit drugs into the US. While a 10% tariff increase on China remains on schedule, no preemptive negotiations were held for it, which could still pose risks to global trade stability.
Foreign Institutional Investors (FIIs) and Market Liquidity
On February 3, Foreign Institutional Investors (FIIs) continued their selling spree for the 23rd consecutive session, offloading equities worth Rs 3,958 crore. Meanwhile, Domestic Institutional Investors (DIIs) remained net buyers, investing Rs 2,708 crore in Indian equities on the same day.
The INDIAVIX index, which gauges market volatility, was up by 1.83% yesterday, trading at 14.3525, reflecting heightened uncertainty amid global trade developments.
Outlook for Indian Markets
The delay in US tariff hikes has provided temporary relief to Indian equities, but investors remain cautious amid global economic uncertainties.
Factors such as US-China trade relations, global inflation trends, and foreign investor movements will continue to shape market sentiment in the coming weeks.
With ongoing negotiations between the US, Canada, and Mexico, market participants will closely monitor developments in global trade policies, as any shift in stance could impact market stability, forex rates, and sectoral performance.
