Sensex, Nifty: Stock market shrugs off Iran tariff worries; Eternal, HDFC Bank lead gainers

Domestic equity benchmarks Sensex and Nifty opened higher for the second straight session on Tuesday, even as US President Donald Trump announced a fresh 25 per cent tariff on countries engaging in trade with crisis-hit Iran, raising geopolitical tensions.

At 9:16 am, the BSE Sensex rose 289.07 points, or 0.34 per cent, to 84,167.24 after rising nearly 397 points in early trade. The NSE Nifty gained 56.35 points, or 0.22 per cent, to 25,846.60, after briefly touching a high of 25,899.80.

For India, Radhika Rao, Executive Director and Senior Economist at DBS Bank, said the scale of total goods trade with Iran had narrowed sharply to less than 0.5 per cent since 2018–19 following broader global restrictions.

“India’s key exports to the country include cereals, coffee, pharmaceuticals, fruits and nuclear reactors, while imports comprise mineral fuels, edible fruits, glass and earth or cement products. It will be important to establish the timeline by which this tariff rate becomes effective and whether it will be an additional layer allowing trading partners to scale back,” she said.

VK Vijayakumar of Geojit Financial said Trump’s weaponisation of tariffs has already impacted global trade, particularly for countries targeted with punitive measures. He said Trump’s latest declaration on imposing 25 per cent tariffs on countries trading with Iran clearly signalled that this policy would continue.

“Apart from targeting other countries, Trump is also targeting those who do not toe his line at home. The charges levelled against the Fed chief Jerome Powell are an example of the fact that Trump will go against anyone who does not fall in line. This unprecedented, unstable and unpredictable behaviour of the US president will continue to weigh on markets,” Vijayakumar said.

From the Indian market perspective, Vijayakumar said the need for a US-India trade agreement became evident when markets bounced back sharply on Monday after US Ambassador to India Sergio Gor said the US was determined to have a trade agreement with India and that talks would resume as early as January 13.

Among Sensex constituents, Eternal advanced 3.72 per cent to Rs 295.85. HDFC Bank gained 0.94 per cent, while Bharat Electronics, Tech Mahindra and State Bank of India climbed 0.71 per cent, 0.64 per cent and 0.61 per cent, respectively.

Wall Street ended higher overnight, with all three major indices closing in the green. The Dow Jones Industrial Average rose 0.17 per cent to 49,590.20, while the S and P 500 gained 0.16 per cent to close at 6,977.27. The Nasdaq Composite edged 0.26 per cent higher to 23,733.90.

Asian markets also traded higher. Japan’s Nikkei 225 was up 3.08 per cent at 53,540.60, while South Korea’s Kospi gained 0.46 per cent to 4,646.05. Hong Kong’s Hang Seng Index rose 1.12 per cent to 26,907.33.

On Monday, the Sensex settled 301.93 points, or 0.36 per cent, higher at 83,878.17, while the Nifty gained 106.95 points, or 0.42 per cent, to close at 25,790.25.

Vijayakumar said geopolitical developments, along with President Donald Trump’s statements and actions, were expected to remain key drivers of market sentiment.