February 4: Sensex Up 1400 Points, Nifty 50 Crosses 23,700 - Trump Tariff Pause Effect

The Indian stock market showed impressive growth on Tuesday, with both the BSE Sensex and Nifty50 benchmark indices rallying strongly. The Sensex crossed 78,600 points at one point, while Nifty50 was above 23,750 intraday. By the end of the day, Sensex closed at 78,583.81, gaining 1,397 points, or 1.81%, while Nifty50 ended at 23,739.25, up by 378 points, or 1.62%.

This surge was driven by positive movements in Asian markets after the United States decided to suspend planned tariffs on Canada and Mexico, easing global trade tensions. As a result, the market value of BSE-listed firms rose by Rs 3.4 lakh crore, reaching Rs 423.70 lakh crore.

Key Factors Behind the Surge:

US Tariff Suspension: A major influence on the market was US President Donald Trump’s decision to delay tariffs on Canada and Mexico for 30 days. This move is conditional, with Canada addressing issues related to fentanyl and Mexico enhancing border security measures. The tariff delay helped ease concerns over global trade, positively impacting market sentiments.

Dollar Index Decline: Following the tariff suspension, the dollar index fell by 0.56% to 108.90, with the euro also weakening by 0.67% to $1.0293. This decline in the dollar came after weaker US manufacturing data, suggesting that the Federal Reserve might hold off on raising interest rates in March.

Positive Global Market Trends: Asian markets responded positively, with Japan’s Nikkei up by 1.6% to 39,140.41 and Hong Kong’s Hang Seng rising by 2.5%. US equity futures also showed gains, with S&P 500 futures up by 0.4%, indicating positive global sentiment.

Automotive Sector Growth: The automotive sector saw significant growth, with the Nifty Auto index rising by 1.8%. Companies like Maruti Suzuki India saw record sales of 212,251 units in January. Eicher Motors also reported a 20% rise in motorcycle sales, while Hero MotoCorp’s total sales grew by 2.13%.

Strong Performance Across Sectors: Most sectors had a strong day, with 12 out of 13 major sectors showing positive movement. Small and mid-cap stocks also rose by 1%, and large companies like Infosys, Tata Motors, and Larsen & Toubro saw strong gains.

Despite the positive trends, foreign institutional investors (FIIs) sold equities worth Rs 3,958.37 crore on Monday. The BSE Sensex had declined by 319.22 points during the five-day positive streak, while Nifty fell by 121.10 points.

Analysts believe the market is still on a positive path, with levels around 23,700-23,840 on Nifty offering key targets, though resistance could be seen at 23,440.