Tariff tensions and expiry fears trigger market volatility 

The market opened with marginal gains on Thursday, with the Sensex rising 210.78 points to 77,499.28, up 0.27 per cent, and the Nifty 50 climbing 62.75 points to 23,549.60, reflecting a 0.27 per cent increase. The market’s early morning performance came against a backdrop of complex global trade dynamics and anticipated March futures and options (F&O) expiry, creating a nuanced trading environment for investors.

Institutional activity emerged as a key market driver, with Foreign Institutional Investors (FIIs) continuing their robust buying strategy. According to market commentary, FIIs were net buyers of over ₹2,200 crore on the previous day and more than ₹20,000 crore in the past five trading sessions. This sustained buying interest potentially provides a critical support mechanism for the market during periods of uncertainty.

The morning’s primary focus was the escalating trade tensions, triggered by US President Donald Trump’s announcement of a 25 per cent tariff on imported cars and light trucks. This development raised significant concerns across multiple sectors, particularly for export-oriented companies. Dr. VK Vijayakumar from Geojit Investments explicitly warned that the tariff would specifically impact Tata Motors, which exports a substantial portion of its Jaguar Land Rover (JLR) cars to the United States.

Global market sentiment also played a crucial role in shaping investor perspectives. Wall Street had experienced a notable downturn, with the S&P 500 declining 1.1 per cent and the NASDAQ Composite dropping 2 per cent, primarily driven by trade tariff concerns and potential regulatory challenges in the technology sector. These international market movements created a cautious backdrop for Indian traders.

Sector-specific movements indicated varied investor strategies. Defence stocks showed particular promise, with analysts highlighting strong order bookings by Bharat Dynamics and Hindustan Aeronautics Limited (HAL). Sugar stocks were expected to remain positive after the government confirmed its one-million-ton export quota for the current season, providing some stability to agriculture-related market segments.

Technical indicators suggested a potential bearish trend that required careful navigation. VLA Ambala, Co-Founder of Stock Market Today, explained that the market had formed a special price action pattern called the Evening Star on the daily timeframe, which could indicate a potential change in momentum. She recommended a “sell-on-rise strategy” as the market approaches the monthly expiry, advising investors to maintain a vigilant approach.

The stock-specific movements revealed interesting market dynamics. The top gainers included Shriram Finance, which saw a 1.51 per cent increase, followed by Wipro at 1.42 per cent and Larsen & Toubro at 1.41 per cent. In contrast, Tata Motors led the losers, dropping 5.42 per cent following the US tariff announcement, with Sun Pharma and Dr. Reddy’s also experiencing notable declines.

The volatility index (INDIAVIX) remained relatively subdued at 13.47, indicating a degree of market stability despite underlying uncertainties. Hardik Matalia, Derivative Analyst at Choice Broking, provided specific technical insights, noting that the immediate support for Nifty is at 23,400, followed by 23,300 and 23,200. This technical perspective offered traders a structured view of potential market movements.

Macroeconomic factors continued to play a significant role in shaping market sentiment. The ongoing discussions about potential tariff implications, combined with the approaching financial year-end, created a complex trading environment. Investors were closely monitoring geopolitical developments, potential policy changes, and corporate performance indicators.

With global markets showing mixed signals and trade tensions escalating, the overarching advice from market experts remained consistent: investors should maintain a disciplined approach, continuously assess risk management strategies, and remain prepared for potential market volatility. The intricate interplay of global trade policies, institutional investments, and sector-specific developments promised to keep the market dynamic and engaging in the coming sessions.