Post Session: Quick Review

Indian stock markets bounced back sharply on Wednesday amid value buying at lower levels as well as strong rally in Information Technology (IT) sector’s stocks. After making cautious start, soon markets turned positive and extended their gains with strong India Services PMI data. 

Some of the important factors in today’s trade:

India's services sector sees strong growth in February: Sentiments were positive as India’s services sector activity expanded sharply in the month of February, boosted by improving domestic and international demand. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index jumped to 59.0 in February from 56.5 in January 

Rupee strengthens against US dollar amid weaker US currency: The Indian rupee strengthened against the US dollar on Wednesday, tracking the weakness in American currency and easing crude oil prices globally, while broad-based interbank dollar sales and RBI's firm defence of 87.40-87.50 levels in recent sessions also helped the rupee to strengthen against the US dollar

Despite FIIs outflows surge: Traders paid no head towards Foreign institutional investors (FIIs) offloaded equities worth Rs 3,405.82 crore on net basis on Tuesday, exchange data showed.

Global front: European markets were trading in green, as traders react to news about the German government's plans to increase defense and infrastructure spending. Besides, Comments from U.S. Commerce Secretary Howard Lutnick that President Donald Trump will ‘probably’ announce a deal to reduce tariffs on Canada and Mexico also contribute to the rally in the market. Asian markets ended in green, as China maintained its growth target for 2025 but the government became more cautious about nominal growth and inflation outlook amid heightened uncertainty surrounding the U.S trade tariff threats.

The BSE Sensex ended at 73730.23, up by 740.30 points or 1.01% after trading in a range of 72894.05 and 73933.80. There were 26 stocks advancing against 4 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 2.66%, while Small cap index up by 2.80%. (Provisional)

The top gaining sectoral indices on the BSE were Utilities up by 4.40%, Power up by 3.67%, Metal up by 3.52%, Telecom up by 3.36% and PSU up by 3.11%, while there were no losing sectoral indices. (Provisional)

The top gainers on the Sensex were Adani Ports and Special Economic Zone up by 4.97%, Tata Steel up by 4.63%, Power Grid up by 4.31%, Mahindra & Mahindra up by 4.09% and NTPC up by 3.81%. On the flip side, Bajaj Finance down by 3.49%, Indusind Bank down by 1.60%, HDFC Bank down by 1.07% and Zomato down by 0.07% were the few losers. (Provisional)

Meanwhile, Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi has said that non-tariff measures being announced by developed economies such as European Union's carbon tax and deforestation regulation limit market access for Indian goods in those markets. He said that the other challenges before Indian exports include insufficient integration with global value chains, high import duties, technology disadvantage, and high cost of logistics (about 8-9 per cent of GDP against 5-6 per cent in developed nations). 

He stated that the export window is also narrowing because of aggressive industrial policies of advanced nations like USA's Inflation Reduction Act and Chips Act, and UK's advanced manufacturing plan. Most non-tariff measures (NTMs) are domestic rules created by countries with an aim to protect human, animal or plant health and the environment. NTM may be technical measures like regulations, standards, testing, certification, pre-shipment inspection or non-technical measures like quotas, import licensing, subsidies, and government procurement restrictions. When NTMs become arbitrary, beyond scientific justification, they create hurdles for trade and are called NTBs (non-tariff barriers).

He further said that export credit as a percentage of total merchandise exports is only 28.5 per cent in India. He noted that total export credit provided is estimated at $124.7 billion as against the estimated requirement of $284 billion for a total merchandise export of $437 billion in 2023-24. Total export credit requirement is estimated for 2030 ($1 trillion goods exports target) at $650 billion. At current levels of financing of $124.7 billion, the trade credit gap is estimated to reach $525 billion by 2030. The Export Credit Guarantee Corporation of India (ECGC) extends a total insurance cover of only $44.9 billion out of a total export credit of $124.7 billion. 

The CNX Nifty ended at 22337.30, up by 254.65 points or 1.15% after trading in a range of 22067.80 and 22394.90. There were 45 stocks advancing against 5 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports and Special Economic Zone up by 5.18%, Tata Steel up by 4.85%, Adani Enterprises up by 4.71%, Mahindra & Mahindra up by 4.33% and Power Grid up by 4.09%. On the flip side, Bajaj Finance down by 3.35%, Indusind Bank down by 1.59%, HDFC Bank down by 1.17%, Shriram Finance down by 0.25% and Grasim Industries down by 0.13% were the top losers. (Provisional)

European markets were trading higher; Germany’s DAX gained 767.71 points or 3.32% to 23,094.52, France’s CAC rose 179.83 points or 2.19% to 8,227.75 and UK’s FTSE 100 increased 64.99 points or 0.74% to 8,823.99.

Asian markets ended higher on Wednesday, even as Wall Street’s shares tumbled overnight on concerns that US President Donald Trump's tariffs on Canada, Mexico and China will lead to a wider trade war and hurt the global economy. Investors are awaiting the release of US ISM Services PMI and ADP Employment Change data for February. Chinese and Hong Kong shares gained after the Chinese government unveiled an annual economic growth target of around 5% and pledged more support for domestic consumption and the tech industry as a trade war with the United States heats up. The Chinese yuan weakened slightly as China boosted its budget deficit to the highest in 30 years. Japanese markets rose slightly after Bank of Japan Deputy Governor Shinichi Uchida signaled further rate hikes, citing inflation and wage growth.