Indian Markets Exhibit Cautious Optimism Amid Global Tariff Uncertainties

Indian stock markets started the week with moderate gains. Experts predict a shallow rally due to current FPI selling, expected to taper with improved corporate earnings. Global factors like looming tariffs and U.S. market trends add complexity. Key sectors showed movement, with metal and auto leading gains.

Indian stock markets commenced the week with moderate optimism, evidenced by both major indices opening in the green but failing to sustain a significant rally. The Nifty 50 index began at 22,194.55, securing a rise of 69.85 points or 0.32%, while the BSE Sensex opened at 73,427.65, up by 229.55 points or 0.31%.

Market experts like Ajay Bagga caution that a sustained rally remains contingent on the easing of Foreign Portfolio Investor (FPI) selling, likely to occur in the next quarter when corporate earnings may demonstrate improved momentum. Bagga predicts, "We foresee a shallow rally based on global and domestic signals. Yet, a significant reduction in intense FPI selling is essential for a sustainable recovery."

Propelling domestic optimism, the upward revision of the Q2 GDP figures alongside a positive Q3 GDP projection of 6.2% have invigorated hopes regarding corporate earnings reaching a nadir in Q3. Increased government capital expenditures and general spending are further anticipated to revive economic propulsion. Sectoral indices on the NSE experienced gains, with the metal and auto industries showing over a 1% surge, while IT and bank stocks marked modest increases.

Internationally, the specter of tariffs looms large, with impending levies on Canada, Mexico, and China creating market jitters. Meanwhile, recent U.S. market dynamics, including moderated inflation signs from the Fed's PCE index and a negative GDP forecast, contribute to global financial uncertainties. According to Sunil Gurjar of Alphamojo Financial Services, the Nifty 50's downward trajectory, showing a 15.78% dip from its apex, highlights a firm bearish trend, with critical support levels around 21,800 now under threat.

In Asia, indices like Japan's Nikkei 225 and Hong Kong's Hang Seng experienced gains, while the Taiwan market fell. The South Korean KOSPI remained closed due to a holiday, further diversifying the regional market outlook as compiled by ANI.

(With inputs from agencies.)