Sensex, Nifty start session on optimistic note amid tariff relief hopes

Indian equity benchmarks made a positive start on Monday after U.S. President Donald Trump indicated he'd retain 'flexibility' when it comes to a reciprocal tariff plan expected on April 2. Some support came with Union Minister Nitin Gadkari’s statement that India's agricultural growth rate is expected to be 20 per cent in coming two years and the Centre's first priority is to make the sector economically viable and create more jobs. Meanwhile, investors are keeping an eye out for India Manufacturing, Services and Composite PMI Flash figures for March, scheduled for release later in the day.

On the global front, Asian markets are trading mostly lower, despite the broadly positive cues from Wall Street on Friday, after Chinese and Australian officials warned of widespread shocks to the global economy from U.S. trade policy. Besides, the manufacturing sector in Japan continued to contract in March, and at a faster pace, with a manufacturing PMI score of 48.3.

On the sectoral front, banking stocks are in focus as the government data showed that dividend payout by public sector banks (PSBs) have risen by 33 per cent to Rs 27,830 crore in FY24, indicating significant improvement in financial health of these lenders. In stocks specific development, NCC jumped on securing a Letter of Award (LoA) worth Rs 1,480.34 crore from Bihar Medical Services and Infrastructure Corporation.

The BSE Sensex is currently trading at 77303.25, up by 397.74 points or 0.52% after trading in a range of 77179.35 and 77498.29. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.73%, while Small cap index was up by 0.86%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.64%, Industrials up by 1.62%, PSU up by 1.48%, Power up by 1.42% and Utilities up by 1.42%, while IT down by 0.24%, Consumer Durables down by 0.23%, Auto down by 0.12% and TECK down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 2.30%, Power Grid up by 2.24%, Axis Bank up by 2.09%, Larsen & Toubro up by 1.99% and Bajaj Finserv up by 1.56%. On the flip side, Titan Company down by 2.49%, Mahindra & Mahindra down by 2.00%, Infosys down by 1.09%, Ultratech Cement down by 0.69% and Eternal down by 0.66% were the top losers.

Meanwhile, economic think tank - the Global Trade Research Initiative (GTRI) has said that the amendments in the customs rules to tighten checks on goods imported under free trade agreements (FTAs) could make it harder for businesses to do imports at concessional duties and may increase compliance cost. However, it said the move would curb the misuse of FTAs as India has seen repeated instances where goods originating from non-FTA countries, such as China, were rerouted through FTA member countries like Vietnam or Singapore to exploit preferential duty benefits.

On March 18, the Ministry of Finance issued a notification, introducing amendments to the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR). The amendment replaces the term, ‘Certificate of Origin’ (CoO), with a broader term, ‘Proof of Origin’, across various rules and forms under the CAROTAR framework. GTRI Founder Ajay Srivastava said ‘This change comes in conflict with the several existing FTAs with ASEAN etc where certificate of origin issued by the exporting country is the accepted document, and added the move could make it harder for businesses to do concessional tariff imports.

Srivastava said electronics, white goods, and auto components often shipped through ASEAN (Association of SouthEast Asian Nations) countries are likely to face heightened scrutiny. GTRI has urged the government to publish a detailed framework outlining what qualifies as acceptable proof of origin, and to provide redress mechanisms for importers facing unjustified denials of preferential tariff claims. It said that now importers would have to ensure access to comprehensive supporting documents that establish the origin of the goods, which is not always feasible, especially when exporters are reluctant to share sensitive trade data like raw material invoices or production costs.

It said ‘The compliance burden will increase, as there is no strict definition of what constitutes adequate proof. If not satisfied, Customs can deny preferential tariffs, effectively imposing full duties and penalties’. It added that importers may also be compelled to share sensitive commercial information, which not only raises privacy and confidentiality concerns, but may also subject them to arbitrary or inconsistent treatment.

The CNX Nifty is currently trading at 23472.90, up by 122.50 points or 0.52% after trading in a range of 23433.50 and 23519.70. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 2.66%, Axis Bank up by 2.27%, Power Grid up by 2.10%, Larsen & Toubro up by 1.92% and Bharat Electronics up by 1.46%. On the flip side, Titan Company down by 2.40%, Mahindra & Mahindra down by 2.16%, Infosys down by 1.23%, Trent down by 0.94% and Dr. Reddy's Lab down by 0.75% were the top losers.

Asian markets are trading mostly in red; Jakarta Composite plunged 155.46 points or 2.48% to 6,102.72, Taiwan Weighted lost 34.64 points or 0.16% to 22,174.46, Hang Seng declined 27.59 points or 0.12% to 23,662.13, Nikkei 225 fell 14.8 points or 0.04% to 37,662.26, Shanghai Composite weakened 8.33 points or 0.25% to 3,356.50 and KOSPI was down by 5.85 points or 0.22% to 2,637.28, while Straits Times was up by 5.82 points or 0.15% to 3,932.27.