Key gauges end lower on Tuesday

Indian equity benchmarks trimmed some of their early losses but ended marginally lower on Tuesday as weak global market, concerns over a global trade war, and continued foreign institutional investors (FII) selling have negatively impacted the domestic markets. However, selective buying in PSU, Capital Goods and Industrials stocks limited the downside.   

Some of the important factors in today’s trade: 

FIIs continued to remain net sellers: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,788.29 crore in the capital markets on a net basis on Monday, according to exchange data.  

FDI in India dropped 5.6% in Oct-Dec: Department for Promotion of Industry and Internal Trade (DPIIT) data showed that the foreign direct investment in India dipped by 5.6 per cent year-on-year to $10.9 billion in October-December quarter of this fiscal due to global economic uncertainties. 

Tariff woes weighed on crude prices: Oil prices extended losses on Tuesday following reports that OPEC+ will proceed with a planned output increase in April and as U.S. tariffs on Canada, Mexico and China came into effect, as well as Beijing's retaliatory tariffs. 

Indian banks performed robustly in 9MFY25: Fitch Ratings stated that Indian banks have exhibited robust performance in the first nine months of the current financial year with the sector's impaired loan ratio close to the trough, and added that there is potential for improvement in impaired loan ratio for FY26. 

Global cues remained weak: European markets were trading lower, while Asian markets settled mostly lower as fresh U.S. tariffs came into effect. While Canada vowed retaliatory 25 percent tariffs on C$155 billion ($107 billion) of U.S. goods, China said it would impose additional tariffs of 10-15 percent on several agricultural goods, including soybeans, corn, dairy and beef.  

Finally, the BSE Sensex fell 96.01 points or 0.13% to 72,989.93, and the CNX Nifty was down by 36.65 points or 0.17% to 22,082.65.

The BSE Sensex touched high and low of 73,033.18 and 72,633.54 respectively. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 1.28%.

The top gaining sectoral indices on the BSE were PSU up by 1.70%, Capital Goods up by 1.41%, Industrials up by 1.29%, Oil & Gas up by 1.10% and Power up by 0.65%, while Auto down by 1.13%, TECK down by 0.86%, IT down by 0.77%, Telecom down by 0.45% and FMCG down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.02%, Zomato up by 2.45%, TCS up by 1.03%, Adani Ports &SEZ up by 0.63% and Power Grid Corporation up by 0.59%. On the flip side, Bajaj Finserv down by 2.70%, HCL Technologies down by 2.40%, Nestle down by 1.71%, Asian Paints down by 1.66% and Sun Pharma down by 1.13% were the top losers.

Meanwhile, the global rating agency - Fitch Ratings in its commentary has said that Indian banks have exhibited robust performance in the first nine months of the current financial year with the sector's impaired loan ratio close to the trough, and added that there is potential for improvement in impaired loan ratio for FY26.

Fitch also said that the improvements in key performance metrics of Indian banks in the past few years will provide strong support for their Viability Ratings (VRs). The Return on Assets (ROA) of Indian banking sector has improved by about 10bp to 1.4 per cent in 9MFY25 from FY24.

The rating agency said that Indian banks' risk appetites have been more calibrated since 2018, with efforts to diversify loans and improve the quality of corporate exposures contributing to lower bad loan formation. Further, it added that lower legacy bad loans drove improvement in banks' gross impaired loan ratios and earningsd.

However, agency noted that, these risk enhancements have yet to be fully tested, and banks have tended to vary risk appetite through cycles, such as growth in unsecured personal loans in recent years until regulatory measures discouraged this behaviour.

The CNX Nifty traded in a range of 22,105.05 and 21,964.60. There were 22 stocks advancing against 28 stocks declining on the index. 

The top gainers on Nifty were SBI up by 3.03%, BPCL up by 2.97%, Bharat Electronics up by 2.80%, Shriram Finance up by 2.03% and Adani Enterprises up by 1.44%. On the flip side, Bajaj Auto down by 4.95%, Hero MotoCorp down by 3.34%, Bajaj Finserv down by 2.65%, HCL Technologies down by 2.28% and Eicher Motors down by 2.01% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 24.99 points or 0.28% to 8,846.32, France’s CAC fell 106.43 points or 1.3% to 8,093.28 and Germany’s DAX lost 460.29 points or 1.99% to 22,686.73.

Asian markets settled mostly lower on Tuesday tracking Wall Street's overnight fall after US President Donald Trump confirmed that 25% tariffs on goods from Mexico and Canada, and he planned 20% tariffs on Chinese imports over fentanyl issues. Donald Trump also said reciprocal tariffs would take effect on April 2 on countries that impose duties on US products, stoking fears of a global trade war. Japanese shares fell sharply after data showed that the unemployment rate in Japan edged up to 2.5% in January from 2.4% in December. Although, Chinese shares gained amid expectations that China’s policymakers will announce a huge stimulus package at a key parliamentary meeting on Wednesday.