Markets open flat amid global trade tensions despite positive domestic data 

Equity markets opened on a cautious note this morning, with the benchmark indices showing marginal gains amid mixed signals from global and domestic fronts. The Sensex climbed 251.85 points or 0.34 per cent to 74,281.61, while the Nifty50 rose 62.60 points or 0.28 per cent to 22,533.10 as of 9.58 AM.

The market sentiment remains divided between encouraging domestic economic data and escalating global trade tensions following recent tariff announcements by the Trump administration. India’s retail inflation eased to 3.61 per cent while industrial production hit an eight-month high of 5 per cent, creating what experts call “a desirable growth-inflation balance.”

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Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, “The better-than-expected decline in CPI inflation to 3.75 per cent in February has brought down inflation below the RBI’s inflation target of 4 per cent. Along with this, the surge in the IIP in January to an 8-month high of 5.01 per cent provides the perfect macro backdrop for a rate cut by the MPC in April.”

However, international developments are casting a shadow over market performance. “Unfortunately the global scenario is highly unfavourable with the trade war triggered by Trump getting worse,” Vijayakumar added. The European Union has retaliated against Trump’s 25 per cent steel tariff with tariffs on $28 billion of US imports, while Canada has imposed tariffs on $20 billion of US exports.

Among sectoral performers, defense and energy stocks led the gains in early trade. BEL emerged as the top gainer on NSE, rising 2.53 per cent with substantial trading volume of over 1.27 crore shares. ONGC followed with a 2.13 per cent increase amid stable global oil prices. Other notable gainers included Tata Steel (1.19 per cent), SBI (0.95 per cent) and Trent (0.89 per cent).

On the losing side, IndusInd Bank declined 1.29 per cent, becoming the top loser despite being among yesterday’s top Nifty gainers. Shriram Finance dropped 1.05 per cent, while Apollo Hospitals, Bajaj Auto and Hero MotoCorp fell by 0.74 per cent, 0.50 per cent and 0.46 per cent, respectively.

The market’s technical indicators suggest a period of consolidation. Akshay Chinchalkar, Head of Research at Axis Securities, observed, “The nifty recovered from its intraday drop, but could not finish the day in the green yesterday — it still generated a daily candle with a long lower shadow. This means that downside demand is potent, and the support area between 22245 – 22330 is pivotal.”

Currency markets remain under pressure with the Indian Rupee trading at 87.149 against the US Dollar. VLA Ambala, Co-Founder of Stock Market Today, warned, “This situation could worsen amid growing concerns such as continued market sell-offs, increased interest in gold ETFs and a declining trend in SIPs.”

Investor behaviour shows noteworthy shifts in fund flows. February saw SIP inflows slump to a three-month low of ₹25,999 crore. Approximately 44.56 lakh SIP accounts were opened during this period, while 54.70 lakh accounts were discontinued. Domestic institutional investors (DIIs) have bought assets worth ₹23,216.19 crore in March 2025, while foreign institutional investors (FIIs) sold ₹18,810.74 crore during the same period.

In commodities, gold and silver prices hit two- and three-week highs, respectively following a cooler-than-expected US inflation report. “Safe-haven demand for the two precious metals remains in place amid global trade friction that could produce slowing world economic growth,” stated Rahul Kalantri, VP Commodities at Mehta Equities Ltd.

Oil prices showed volatility but extended gains amid cooling US inflation and rebounding US equity markets. WTI crude oil found support at $66.80-66.00 and faces resistance at $67.90-68.60 in today’s session.

Market analysts recommend caution in the current environment. Hardik Matalia, Derivative Analyst at Choice Broking, advised, “Traders are advised to exercise caution and wait for confirmation of price action at critical levels before initiating fresh positions.”

For long-term investors, the current correction may present opportunities.“ I recommend investors who previously missed the market rally consider accumulating value. As for those who have already invested, they should focus on hedging their portfolio and remain invested as the market will rebound,” suggested VLA Ambala.

With the Holi festival approaching on March 14, traders are bracing for a challenging environment as they navigate between domestic tailwinds and global headwinds.