Sensex, Nifty: 5 reasons why stock market is rising today

Benchmark indices Sensex and Nifty climbed on Tuesday after a three-day fall on value buying. There are hopes that India would be impacted moderately by the US trump tariffs. The fact that rupee is appreciating against the dollar, Brent crude has dropped to $64 a barrel level and the Indian economy is seen faring relatively better than EM peers in the Trump tariff era, are also leading to market optimism. Add to that are rising US index futures, which are up, even as China has signaled it won't reverse 34 per cent tariffs that it imposed on the US. 

Investors are also keenly awaiting the RBI policy outcome tomorrow, and the kick start of earnings season from April 10 (TCS). 

Kotak Institutional Equities said the performance of the Indian market in the next few weeks would depend on the response of various countries to the US’s reciprocal tariffs in the form of reconciliation or retaliation (China). Eyes would also be on the behavior of retail and institutional investors and the performance of other markets in a volatile setting. 

"The Indian market has held up better so far, based on investors’ (1) denial of the increased geopolitical, global and domestic macroeconomic and sector-specific risks, faith in a reversal in the tariff and trade policies of the US and belief that India is relatively better off in the ‘reciprocal’ regime," Kotak said. 

The BSE Sensex was trading at 74,660.32, up 1,522.42 points or 2.08 per cent. Nifty stood at 22,642.10, up 480.50 points or 2.17 per cent.

MOFSL said while India itself has been subjected to a 26 per cent reciprocal tariff, as few Asian peers face higher levels of tariffs – such as China: 54 pre cent, Vietnam: 46 per cent, Sri Lanka: 44 per cent, Bangladesh: 37 per cent, Thailand: 36 per cent and Taiwan: 32 per cent.

"Further, India may negotiate a bilateral trade agreement (BTA) with the US," it said.

There are hints the trade war is likely to be confined to US and China, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He noted that the EU and Japan have opted for negotiations and India has already in talks on a BTA with the US. 

Nuvama, meanwhile, warned the market could be entering a capitulation phase i.e. broad-based selloff with cyclical sectors such as metals, industrials, renewable energy most vulnerable, the brokerage said.  

"Markets bottom not when easing starts, but rather when it is mature (QE) and valuations cheap," it said.