Despite tariff warnings from Donald Trump, the Indian stock market closed b on Thursday. Nifty and Sensex showed gains in the last hour, with IT, Pharma, and PSU Banking sectors playing a crucial role. F&O expiry and short covering were also major reasons for the recovery.
New Delhi: After a day of weakness, the stock market witnessed a b recovery in the last hour on Thursday. Despite Donald Trump's warning of additional tariffs on India, the Nifty closed with a gain of nearly 250 points at 24,596, and the Sensex closed 79 points higher at 80,623. Buying in IT, Pharma, and PSU banks strengthened the market. According to analysts, this surge was made possible by F&O expiry, short covering, and buying of blue-chip stocks at lower levels.
Recovery from Lower Levels: Pressure Throughout the Day, Surge at the End
Thursday's session was quite exciting for the stock market. The market had a weak start, and selling pressure dominated throughout the day. However, as the last hour of trading began, the market reversed course and picked up pace.
The Nifty closed at 24,596 with a gain of 22 points, while the Sensex closed at 80,623 with a gain of 79 points. The highlight was the b buying from lower levels, which fueled this surge.
Which Sectors Showed Strength?
The IT and Pharma sectors played the most important role in the market recovery. Good buying was seen in both these sectors in the last hour.
In addition, the banking sector, especially PSU banks, also supported the market. Strength in stocks like State Bank, Bank of Baroda, and Canara Bank pushed the Nifty Bank into positive territory.
What Were the Reasons for the Recovery?
Several reasons are being cited for this sudden surge in the market. The first reason is the F&O expiry day, which led to short covering in the last hours. The second reason was the buying of blue-chip stocks at lower levels, which quickly pulled the index up. In addition, analysts believe that the market had already reached the oversold zone, so any positive signal created a bullish environment.
Limited Impact of Trump's Tariff Threat
The statement by US President Donald Trump regarding imposing additional tariffs on India shook global markets, but the Indian market considered it a move with limited impact.
Prashant Khemka, founder of White Oak, says that Trump's attitude is part of a strategy rather than a policy. He often adopts such a stance before the final agreement to strengthen his position.
According to him, India's exports to the US are not so high that the tariff will have a broad impact. However, some sectors like textiles may face pressure, but its impact on the overall economy will not be very deep.
Hope for a Trade Deal Boosted Confidence
The market hopes that an agreement can be reached between India and the US before the deadline of August 27. Nilesh Shah, MD of Kotak Mahindra AMC, believes that both countries need each other. India's economy is more dependent on domestic demand, and the impact of US tariffs will be limited to only selected sectors.
According to him, this issue will be resolved soon, and the current uncertainty may prove to be temporary.
A Cautious Environment Remains in the Market
While the market gave relief in the last hour, Anuj Singhal, Managing Editor of CNBC Awaaz, believes that investors should still remain cautious.
He said that the market is currently not dependent on trends and the direction is changing rapidly. Until global and domestic uncertainties are clear, sensitivity will remain in the market.
