Financials Lift Markets Amid Foreign Inflows; Auto Stocks Decline on U.S. Tariff Concerns

The broader market showed a positive bias, with mid-cap and small-cap indices rising about 0.2 per cent.

Market Update at 2:20 PM: Indian benchmark indices, Nifty 50 and Sensex, gained 0.4 per cent as financial stocks led the rally on the back of renewed foreign inflows.

The broader market showed a positive bias, with Mid-Cap and Small-Cap indices rising about 0.2 per cent. Financials advanced 0.9 per cent as foreign investors accumulated Indian shares over the past five sessions, finding valuations attractive.

On the other hand, auto stocks faced selling pressure, with the sector declining 1 per cent after the U.S. announced a 25 per cent tariff on auto imports starting April 3.

Tata Motors fell 5.4 per cent, given its significant exposure to the U.S. market through Jaguar Land Rover.

Auto parts manufacturers also saw declines, with Samvardhana Motherson and Sona BLW dropping 3 per cent and 6 per cent, respectively, while Bharat Forge lost 1 per cent.

Market Update at 12:15 PM: Indian benchmark indices, which started the session negatively, recovered and traded in green as the heavyweight financials stocks jumped.

By midday, the Nifty 50 was trading with gains, up 100 points from its previous close, trading above the 23,500 mark with gains of 0.42 per cent. Similarly, the Sensex trading is trading higher with gains of 420 points or 0.55 per cent. The Bank Nifty outperformed benchmark indices and is up by 0.72 per cent. Meanwhile, the India VIX was trading near the 13.5 mark, up by 0.7 per cent, indicating increased volatility in the Indian market.

By midday, the top gaining stocks that lifted Nifty 50 higherl are HDFC Bank (+40.21 pts), Larsen and Toubro (+20.81 pts) and ICICI Bank (+15.19 pts). On the other hand, Tata Motors (-19.8 pts), Sun Pharmaceuticals (-8.31 pts) and Bharti Airtel (-5.12 pts) were dragging the index down.

Trump will impose retaliatory tariffs on April 2, but the U.S. administration has indicated that not all tariffs will be imposed. However, there is no clarity on the countries and sectors that may be spared.

On Wednesday, overall market breadth remained neutral, as 1,302 stocks advanced while 1,392 declined. The Nifty Mid-cap 100 and Nifty Small-cap 100 indices were trading marginally higher, up by 0.15 per cent and 0.18 per cent, respectively.

On the sectoral front, 14 out of 17 sectors recorded gains, with Nifty 50 Media rising 0.5 per cent. , while Nifty Pharma (-1.5 per cent) and Nifty Healthcare (-1 per cent) were emerging as the top-losing sectors. 

Market Update at 10:25 AM: Indian equity benchmarks started Thursday's session on a weaker note, pressured by declines in auto stocks. Investor sentiment took a hit following U.S. President Donald Trump's auto tariffs, coupled with concerns over impending U.S. reciprocal tariffs.

At 10:10 a.m., the benchmark indices pulled back to positive territory; Sensex jumped back to the day’s high by 260 points or 0.37 per cent, while Nifty 50 traded above the 23,600 mark, up by 120 points or 0.52 per cent. 

Asian markets saw a decline during the session, while Wall Street closed with sharp losses overnight. Following the U.S. market close on Wednesday, Trump revealed plans to introduce a 25 per cent tariff on automotive imports, set to take effect on April 2.

Although the U.S. administration is preparing to implement retaliatory tariffs on the same date, it has signalled that not all tariffs will be enforced. However, there is still uncertainty regarding which countries and sectors might receive exemptions.

On the sectoral front, 14 out of 17 sectors recorded gains, with Banking stocks leading the gains in the market up by more than 0.8 per cent. 

In the last seven sessions, the two benchmarks added 5.7 per cent, turning positive for year-to-date, as foreign capital inflows and hopes of improved domestic macroeconomic factors drove bargain buying.

In today’s trade, India VIX is trading around the 13.7 mark, up by 1.6 per cent, indicating a increase in market volatility.

About 1,299 stocks are advancing against 1,260 declining stocks, thus indicating a neutral sentiment in the broader market.

Pre-Market Update at 7:45 AM: Indian stock market indices, Sensex and Nifty 50, are expected to open lower on Thursday, influenced by weak global cues following the 25 per cent tariff imposition on automotive imports by US President Donald Trump.

Additionally, trends in Gift Nifty suggest a subdued start for the Indian markets, as it was trading near 23,500, approximately 22 points lower than the previous close of Nifty futures.

The US stock market closed significantly lower on Wednesday, weighed down by declines in Nvidia and Tesla shares, as investors awaited the impact of upcoming US tariffs on automotive imports. The Dow Jones Industrial Average slipped 0.31 per cent to 42,454.79, while the S&P 500 dropped 1.12 per cent, ending at 5,712.20. The Nasdaq saw the steepest decline, falling 2.04 per cent to settle at 17,899.02.

President Donald Trump has announced a 25 per cent tariff on all imported cars and light trucks, effective next week. Speaking at an Oval Office event, he stated, “We’re implementing a 25 per cent tariff on all vehicles not manufactured in the United States.”

Following this announcement, auto stocks experienced a sharp decline. General Motors saw an 8 per cent drop in after-market trading, while Ford and Stellantis’ US-traded shares fell by approximately 4.5 per cent. Tesla also recorded a 5.6 per cent decline.

The impact extended to global markets, with Asian automakers Toyota, Honda, and Hyundai witnessing a nearly 3 per cent dip in their stock prices.

Asian markets saw a decline on Thursday, mirroring losses from Wall Street overnight following the announcement of a 25 per cent tariff on U.S. auto imports. Japan’s Nikkei 225 slipped 0.80 per cent, while the Topix index recorded a 0.40 per cent drop. South Korea’s Kospi index decreased by 0.65 per cent, and the Kosdaq edged down 0.33 per cent. Meanwhile, futures for Hong Kong’s Hang Seng index pointed to a weaker opening.

Brent crude slipped 0.23 per cent to USD 73.84 per barrel, while US WTI crude futures edged up 0.03 per cent to USD 69.60.

The dollar index, which measures the U.S. currency against a group of major peers, eased by 0.16 per cent to 104.03. Its recent strength was driven by expectations of new tariffs, while USD/INR was trading at 85.77.

On Wednesday, the Indian stock market declined sharply as investors locked in profits following a seven-day winning streak in the key indices. The Sensex dropped 728.69 points (0.93 per cent) to close at 77,288.50, while the Nifty 50 ended 181.80 points (0.77 per cent) lower at 23,486.85.

On March 26, 2025, foreign institutional investors (FII) bought shares worth Rs 2,240.55 crore, while domestic institutional investors (DII) sold shares worth Rs 2,240.55 crore.

Stocks that are banned for trading in the F&O segment on March 27, 2025, is Hindustan Copper Ltd only.

Disclaimer: The article is for informational purposes only and not investment advice.