Gaining rally continues over Dalal Street after Donald Trump tariff pause

A gaining rally remained intact over the Dalal Street in early afternoon deals, with both Sensex and Nifty reaching their intraday high points, on the back of heavy buying at Capital Goods and Industrials counters, driven by a pause in US tariff actions. US President Donald Trump announced a temporary halt to additional tariffs on imports from Mexico and Canada. Besides, Finance Secretary Tuhin Kanta Pandey has said that there is no concern over rupee value and the Reserve Bank of India (RBI) is managing the volatility of the local currency. He further noted that the Indian rupee is free-float and no control or fixed rate is applicable on the currency.

On the global front, Asian markets were trading mostly in green, after Hong Kong's economy expanded at an accelerated pace in the final quarter of 2024. The advance estimates from the Census and Statistics Department showed that gross domestic product advanced 2.4 percent year-over-year in the fourth quarter, faster than the 1.9 percent growth in the third quarter. On a seasonally adjusted quarter-to-quarter basis, real GDP increased by 0.8 percent compared to the previous quarter.

The BSE Sensex is currently trading at 77906.69, up by 719.95 points or 0.93% after trading in a range of 77402.37 and 78048.66. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.76%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.75%, Industrials up by 1.86%, Oil & Gas up by 1.82%, PSU up by 1.76% and Energy up by 1.72%, while Consumer Durables down by 0.53%, Consumer discretionary down by 0.24% and FMCG down by 0.12% were the few losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.93%, Tata Motors up by 3.03%, Indusind Bank up by 2.18%, Adani Ports & SEZ up by 1.98% and Ultratech Cement up by 1.80%. On the flip side, Zomato down by 2.67%, Titan down by 1.48%, Nestle down by 1.12%, Bajaj Finserv down by 1.09% and Bajaj Finance down by 1.00% were the top losers.

Meanwhile, Fitch Ratings has said that India's pace of debt reduction is gradual, leaving room for a downside risk to sovereign rating in the eventuality of a significant economic shock. However, it expressed confidence in India's ability to stick to its medium-term fiscal framework, which aims to reduce debt and bring it on a downward trajectory over time.  In August 2024, Fitch affirmed India's sovereign rating at 'BBB-' with a stable outlook. India's rating has remained unchanged at 'BBB-', the lowest investment grade, since August 2006.

Fitch considers the budget as broadly neutral for growth, with the consumption boost from tax cuts and sustained capital expenditure likely to offset the contractionary effects of deficit reduction. It said the policy focus on boosting investment through deregulation is expected to have a positive impact on medium-term growth, but its success will depend on the effective implementation of these policies. It added that sustained deficit reduction, adherence to fiscal targets, and continued transparency would further strengthen India's fiscal credibility, which Fitch affirmed when it maintained the 'BBB-' rating with a Stable outlook in August 2024. 

However, the rating agency said fiscal metrics remain weak compared to global peers, with general government deficits, debt, and debt service burdens significantly higher than the median for similar economies. It said that the government has provided greater clarity on its medium-term fiscal strategy, which aims to reduce central government debt to 50 per cent of GDP (± 1 per cent) by FY31, about 7 per cent lower than FY25.  

The CNX Nifty is currently trading at 23577.60, up by 216.55 points or 0.93% after trading in a range of 23423.15 and 23616.60. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.93%, Bharat Electronics up by 3.21%, Shriram Finance up by 3.16%, Tata Motors up by 2.98% and Cipla up by 2.69%. On the flip side, Trent down by 7.32%, Britannia down by 1.51%, Titan down by 1.27%, Hero MotoCorp down by 1.21% and Nestle down by 1.17% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 470 points or 2.32% to 20,687.26, Jakarta Composite gained 48.81 points or 0.69% to 7,078.87, KOSPI increased 27.74 points or 1.12% to 2,481.69, Nikkei 225 surged 278.28 points or 0.72% to 38,798.37 and Taiwan Weighted added 99.25 points or 0.44% to 22,793.96, while Straits Times fell 4.17 points or 0.11% to 3,822.30.