NEW DELHI: India's equity market snapped its 10-day losing streak despite weak global cues arising from an escalating global trade war. The recovery was driven by bargain buying across IT, Auto, and other sectors that had fallen sharply in the ongoing correction.
The BSE Sensex surged 740.30 points, or 1.01%, to settle at 73,730.23, while the NSE Nifty50 advanced 254.65 points, or 1.15%, to end at 22,337.30. Broader markets witnessed a sharp rally, with the BSE Midcap and BSE Smallcap indices surging by 2.66% and 2.8%, respectively.
Vinod Nair, Head of Research at Geojit Financial Services stated that emerging markets, including India, experienced a relief rally supported by a weakening US dollar. "This upward momentum occurred despite the imposition of US tariffs on Mexico, Canada, and China, as well as the looming threat of retaliatory measures," added Nair.
Bajaj Broking highlighted that the pullback was driven by several factors, including strength in Asian markets, bargain buying in oversold stocks, and value buying in blue-chip stocks. All 13 major sectoral indices closed in the green, with Metals, Information Technology, and Automobile stocks leading the rally.
Uncertainty remains
Analysts remain uncertain whether Wednesday's rally will lead to a sustained recovery, as global markets continue to face uncertainty over trade wars. Prior to Wednesday's gain, the Nifty50 and Sensex had declined more than 16% each from their September 2024 peak and had slumped about 7% each in 2025.
The recent correction is largely attributed to US President Donald Trump's tariff actions and significant outflows of foreign investors from India. Additionally, slowing economic and corporate earnings growth, a weakening rupee, and expensive valuations have weighed on the local market.
"While the rebound is encouraging, traders should avoid reading too much into a single-day bounce and wait for further confirmation. On the benchmark front, Nifty may face resistance around the 22,500-22,700 zone if the recovery continues. Amid this setup, we maintain a stock-specific approach, favoring banking, financials, and metals for long trades while remaining selective in other sectors," said Ajit Mishra, SVP of Research at Religare Broking.
Nair added that while the long-term consequences of the ongoing trade conflict remain uncertain, elevated US inflation in the near term could reduce the likelihood of an interest rate cut. However, the sustainability of this recovery remains uncertain amid escalating global trade tensions and their potential long-term economic ramifications.
In the Nifty50 pack, Adani Ports, Tata Steel, M&M, and Adani Enterprises were the top gainers, surging 4-5%.