The key equity benchmarks traded with major gains in early trade after the United States temporarily delay its planned tariffs on Canada and Mexico, alleviating concerns of a potential full-scale trade war. The Nifty traded above the 23,500 level. Barring the FMCG index, all the other sectoral indices on the NSE were traded in green.
At 09:30 IST, the barometer index, the S&P BSE Sensex, surged 527.44 points or 0.70% to 77,714.31. The Nifty 50 index rallied 150.95 points or 0.65% to 23,512.60.
The broader market outperformed the headline indices. The S&P BSE Mid-Cap index rose 1.09% and the S&P BSE Small-Cap index added 0.90%.
The market breadth was strong. On the BSE, 2,077 shares rose and 544 shares fell. A total of 109 shares were unchanged.
Foreign portfolio investors (FPIs) sold shares worth Rs 3,958.37 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 2,708.23 crore in the Indian equity market on 3 February 2025, provisional data showed.
Stocks in Spotlight:
Power Grid Corporation slipped 2.27% after the company reported a 4% fall in net profit to Rs 3,862 crore even as revenues rose by 3% to Rs 11,550 crore in Q3 FY25 as compared with Q3 FY24. The public sector undertaking has declared an interim dividend of Rs 3.25 apiece.
Premier Energies rallied 3.48% after the company reported a 491% rise in net profit to Rs 255 crore on a 140% increase in revenue to Rs 1,713 crore in Q3 FY25 as compared with Q3 FY24.
Numbers to Track:
The yield on India's 10-year benchmark federal paper was up 1.75% to 6.787 as compared with previous close 6.778.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 87.0275, compared with its close of 87.1100 during the previous trading session.
MCX Gold futures for 4 April 2025 settlement rose 0.14% to Rs 83,444.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.30% to 108.74.
The United States 10-year bond yield added 0.68% to 4.574.
In the commodities market, Brent crude for the April 2025 settlement lost 40 cents, or 0.53%, to $75.56 a barrel.
Global Markets:
Asian stocks rebounded on Tuesday following news that the U.S. will postpone tariffs on Mexico and Canada for a month to allow for negotiations on border security. However, investor concerns persist due to the U.S. administration's warning that tariffs on China could increase if a trade deal addressing trade imbalances and fentanyl trafficking is not reached.
Uncertainty surrounding trade policies remains a key concern for investors, particularly given the expressed intent to impose additional tariffs, including a proposed 10% universal tariff.
The Canadian Prime Minister stated on Monday that the U.S. had agreed to a 30-day delay on planned tariffs following a meeting between the two leaders. This announcement came shortly after a similar 30-day delay on tariffs against Mexico was announced after a call between the U.S. and Mexican leaders. However, tariffs on China are still scheduled to take effect on Tuesday. China has expressed strong opposition to these tariffs and vowed to retaliate.
Over the weekend, tariffs were announced: 25% on Canada and Mexico, and 10% on China (with a reduced 10% tariff on Canadian oil).
U.S. stock indices experienced sharp declines on Monday following the tariff announcements but recovered from their session lows after the tariff delays were announced. The S&P 500 closed down 0.8%, the NASDAQ Composite fell 1.2%, and the Dow Jones Industrial Average decreased by 0.3%.
In addition to earnings reports, this week's focus is on the January nonfarm payrolls data, which is due on Friday and is expected to influence interest rate expectations.