Markets rally on trade relief as US pauses tariffs on Canada, Mexico
Indian equity markets opened higher on Tuesday, with the Sensex surging over 700 points and Nifty gaining nearly 1 per cent, as investor sentiment improved after the US delayed implementing tariffs on Canada and Mexico while maintaining them on China.
The Sensex opened higher at 77,687.60 compared to its previous close of 77,186.74 and is currently trading at 77,896.18, up by 709.44 points or 0.92 per cent. Similarly, the Nifty opened at 23,509.90 against its previous close of 23,361.05 and is now at 23,567.25, gaining 206.20 points or 0.88 per cent.
“The delay in US tariffs on Canada and Mexico has eased some concerns over global trade tensions, though uncertainties remain regarding China,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd. “However, local investors will be closely watching this week’s RBI monetary policy announcement for cues on interest rates and economic outlook.”
Among sectoral gainers, metal stocks outperformed with Hindalco leading the Nifty pack, surging 3.53 per cent. Defense major Bharat Electronics Limited rose 3.17 per cent, while infrastructure giant Larsen & Toubro gained 2.59 per cent. Auto stocks also saw strong buying with Tata Motors advancing 2.56 per cent.
However, retail and FMCG stocks faced selling pressure. Trent emerged as the top loser, falling 4.62 per cent, followed by Hindustan Unilever which declined 1.52 per cent. Britannia Industries, Power Grid and ITC Hotels also traded in the red.
The Indian rupee hit a record low of 87.17 against the US dollar, raising concerns among foreign investors. “January witnessed the second-highest FII sell-off of ₹87,374.66 crore after October 2024’s outflow. The weakening rupee could impact technology and financial services sectors which rely on foreign investments,” noted VLA Ambala, Co-Founder, Stock Market Today.
In commodities, gold prices touched fresh lifetime highs amid safe-haven buying. “Gold and silver could maintain bullish momentum amid global central banks buying and safe-haven demand,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd. Gold found support at ₹82,980-82,710 with resistance at ₹83,470-83,650.
Crude oil prices remained volatile after the US trade tariff news. “The OPEC+ decision to increase production from April as per schedule could limit gains,” Kalantri added. Crude oil showed support at ₹6,260-6,200 with resistance at ₹6,390-6,450.
Technical analysts remain cautious despite the positive opening. “The current market texture is volatile and non-directional. For day traders, 23,270 and 23,220 would act as key support zones, while resistance lies at 23,500 and 23,550,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
The GIFT Nifty indicates sustained momentum through the day after previous sessions lacked positive triggers. Trading volumes remained elevated as institutional activity picked up following recent consolidation.
