Market Recovers After 10-Day Losing Streak; Nifty, Sensex Open Higher

Indian benchmark indices opened on a positive note on March 5, breaking a historic 10-day losing streak for the Nifty. This marked a welcome relief for investors who had seen the markets languishing in recent days. Despite a cautious sentiment prevailing in global markets, both the Sensex and Nifty made gains, with analysts advising a "wait-and-watch" approach.

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The Sensex opened 368.66 points higher at 73,358.59, while the Nifty gained 108.95 points to reach 22,191.60 as of 09:29 am. Analysts were hopeful about a rebound, especially after the Nifty found support around the 22,000-mark, which it had breached for the first time since June 2024. Senior Technical Analyst Rupak De from LKP Securities highlighted that although the market sentiment hasn’t turned fully positive, signs of recovery are evident, especially with the Nifty holding support in the 21,800–22,000 range. However, any drop below 21,800 could alter this outlook.

Market breadth was strong, with 2,303 stocks advancing, 553 declining, and 120 remaining unchanged. Despite the recovery, investors are urged to stay cautious and see whether the market can maintain its upward momentum or if the sell-on-rise sentiment will reemerge. Global concerns, particularly over trade wars and tariffs imposed by the US, continue to keep investors on edge.

US President Donald Trump's tariffs on countries such as China, Mexico, and Canada have raised fears of a global trade war. The situation worsened after Trump’s announcement of retaliatory tariffs, with investors worried about the impact on India, which has imposed 100% tariffs on US-made automobiles. These concerns have led to considerable volatility in global markets, and India is no exception. Trump's rhetoric around trade policies has contributed to widespread uncertainty, affecting market sentiment.

In India, foreign institutional investors (FIIs) continue to sell equities, which has weighed on the rupee and other market segments. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, observed that trading volumes had dipped, but the lack of any new major developments might trigger market moves in the short term. While caution is recommended, there are still pockets of opportunity, and some analysts, including Devarsh Vakil from HDFC Securities, anticipate that the market could see a bottom soon.

The broader market also showed signs of a recovery, with the BSE SmallCap and BSE MidCap indices climbing nearly 2% each, outpacing large-cap stocks. However, the small- and mid-cap indices are still in bear market territory, having fallen over 20% from their record highs in February.

On the sectoral front, Nifty IT led the gains, surging by over 2%. Other significant gainers included Nifty Auto, Nifty PSU Bank, and Nifty Metal, all advancing by 1.5-2%. Among the Nifty 50 stocks, Tata Steel, HCLTech, BPCL, M&M, and NTPC emerged as the top gainers, rising by 2-3%. On the other hand, Bajaj Finance and Bajaj Finserv suffered losses, falling by 1-3%.

The day also saw a significant move by BSE shares, which dropped 9% after its rival, the National Stock Exchange, announced a shift in expiry dates for all F&O contracts, moving them from Thursday to Monday, effective April 4.

Conclusion

While the market showed a positive start, the ongoing uncertainty surrounding global trade wars, especially the impact of US tariffs, continues to weigh on investor sentiment. Analysts remain cautious and recommend a wait-and-watch approach as the market navigates these turbulent times. Investors are advised to keep an eye on critical levels for the Nifty and Sensex, and be prepared for any sharp fluctuations.