Markets fail to hold opening gains; trade lower in early deals

Indian equity benchmarks made a positive start on Thursday, following the broadly positive cues from Wall Street overnight coupled with higher opening in Asian counterparts, as traders reacted positively to news of a one-month delay in certain U.S. tariffs on Mexico and Canada imports as well as tumbling crude oil prices. The White House indicated that Trump is open to further tariff concessions, easing concerns about potential economic fallout. However, markets failed to hold their opening gains and slipped below neutral lines in early deals amid foreign fund outflows. The Foreign institutional investors (FIIs) extended their selling on tenth day on March 5 as they sold equities worth Rs 2895.04 crore. 

Losses remained limited as the Reserve Bank of India (RBI) announced that it will conduct open market purchases of government securities and USD/INR swaps, amounting to around Rs 1.9 lakh crore in March in a bid to inject liquidity into the banking system. On the sectoral front, pharma stocks were in focus as the local pharma industry urged the government to consider eliminating duties on drug imports from the US, amid concerns that the US may impose reciprocal tariffs on pharmaceutical exports from India.

The BSE Sensex is currently trading at 73457.83, down by 272.40 points or 0.37% after trading in a range of 73415.68 and 74308.59. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.54%, while Small cap index was up by 0.99%.

The top gaining sectoral indices on the BSE were Energy up by 0.95%, Oil & Gas up by 0.92%, Metal up by 0.89%, Realty up by 0.60% and Basic Materials up by 0.53%, while TECK down by 0.49%, Telecom down by 0.48%, Bankex down by 0.40%, Consumer Durables down by 0.29% and IT down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.08%, Tata Steel up by 1.30%, Reliance Industries up by 0.98%, Zomato up by 0.90% and Mahindra & Mahindra up by 0.74%. On the flip side, Bharti Airtel down by 1.52%, Infosys down by 1.06%, Ultratech Cement down by 1.05%, Kotak Mahindra Bank down by 1.05% and ITC down by 1.04% were the top losers.

Meanwhile, with US President Donald Trump's threat of reciprocal tariff stoking fears of a global trade war, India is looking at finding an amicable solution to the challenge under the broader framework of a trade deal with Washington. In his latest salvo, the US president mentioned India alongside the European Union, China and Canada for charging higher tariffs on American products. In line with his 'America First' policy, Trump announced during the speech reciprocal tariffs from April 2 on numerous trading partners and nations that impose higher levies on imports from the United States.

He said other countries have used tariffs against the US for decades and now, it is 'our turn' to start using them against those nations. He added ‘On average, the European Union, China, Brazil, India, Mexico and Canada -- have you heard of them? And countless other nations charge us tremendously higher tariffs than we charge them’. He also said ‘It is very unfair. India charges us auto tariffs higher than 100 per cent. China's average tariff on our products is twice what we charge them. And South Korea's average tariff is four times higher’. 

Prime Minister Narendra Modi and Trump during their February 13 talks in Washington DC agreed to negotiate a mega trade deal by the end of this year and set an ambitious target of $500 billion in annual trade by 2030 to narrow the trade deficit. A joint statement on the Modi-Trump talks said ‘Recognising that this level of ambition would require new, fair-trade terms, the leaders announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement by fall of 2025’.

To advance this innovative, wide-ranging BTA, the US and India will take an integrated approach to strengthen and deepen the bilateral trade across the goods and services sector, and work towards increasing market access, reducing tariff and non-tariff barriers, and deepening supply-chain integration. Both sides made firm commitment to boost the overall trade and India hopes that a mutually beneficial outcome will emerge on the issue of tariffs.

The CNX Nifty is currently trading at 22253.25, down by 84.05 points or 0.38% after trading in a range of 22246.75 and 22491.30. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.12%, BPCL up by 1.94%, Shriram Finance up by 1.77%, Tata Steel up by 1.39% and Hindalco up by 1.06%. On the flip side, Trent down by 1.75%, Bharti Airtel down by 1.70%, SBI Life Insurance down by 1.56%, Tata Consumer Products down by 1.21% and HDFC Life Insurance down by 1.18% were the top losers.

Asian markets are trading mostly in green; Hang Seng jumped 622.72 points or 2.64% to 24,216.93, Nikkei 225 surged 345.89 points or 0.92% to 37,764.13, Jakarta Composite gained 111.35 points or 1.7% to 6,642.75, Shanghai Composite strengthened 35.26 points or 1.04% to 3,377.22, Straits Times rose 30.68 points or 0.79% to 3,929.08 and KOSPI increased 16.27 points or 0.64% to 2,574.40, while Taiwan Weighted lost 116.67 points or 0.51% to 22,755.23.