Indian benchmark indices Nifty and Sensex ended their 7-day winning streak on Wednesday, following a sharp decline in pharma stocks amid tariff concerns. The session was volatile, with significant drops in metal, PSU bank, and oil & gas stocks countering the gains in other sectors. Profit booking further dampened market sentiment, although the resilience of the IT sector had helped the indices extend their gains to seven consecutive sessions earlier.
At 9:50 am, the Sensex was down by 183.23 points or 0.23 per cent at 77,833.96, and the Nifty had fallen by 37.40 points or 0.16 per cent to 23,631.25. Of the total shares, 1,194 advanced, 1,853 declined, and 134 remained unchanged.
In the US, consumer confidence dropped to its lowest level in over four years in March, as households expressed concerns about a potential recession and rising inflation due to tariffs. Meanwhile, Asian stocks saw modest gains on Wednesday as investors looked for a clear direction, influenced by the weak US consumer confidence data and a late rally in US equities.
Broader Market Update
The broader market continued to show weak trends, with the Nifty Midcap 100 dropping 0.2 per cent and the Smallcap 100 declining by 0.6 per cent. Despite the recent rally, many analysts remain cautious about this segment due to ongoing valuation concerns, with the upcoming earnings season expected to provide further insights into their direction.
Sectorial Update
Out of the 13 sectors, 12 ended in the red. IT, Metal, Pharma, and PSU Bank were the biggest decliners, falling by as much as 0.8 per cent. Consumer Durables, Energy, and Auto also traded lower, losing up to 0.4 per cent. The FMCG index was the only sector to gain, rising by 0.2 per cent in the morning.
Expert Comment
VK Vijayakumar, Chief Investment Strategist, Geojit Investment, said, "Even with the April 2nd reciprocal tariff day looming large the market has turned resilient indicating further upside. This will happen if the reciprocal tariffs are less stringent than feared. A bilateral agreement between US and India also is a likely scenario if the negotiations underway between the two countries lead to a positive outcome."
"The fundamental support to the market comes from India’s improving macros and the FIIs turning buyers. The total FII buy figure of Rs 19136 crores in the last four trading days indicate that this positive trend is likely to continue. Consequently fairly valued high quality financials will continue to be resilient. If the reciprocal tariffs are not as severe as feared, pharmaceutical stocks will rebound smartly," he added.