The benchmark stock indices Sensex and Nifty gained on Tuesday morning, despite growing fears over Trump's 'aggressive' trade policy. This is a typical example of 'buy on rumors, sell on news'. The dollar index sank more than 1%, the 10-year US bond rate declined, and Asian markets advanced in early trade.
Trump trade has peaked, according to V K Vijayakumar of Geojit Financial Services, with the decrease in US bond yields and the dollar index as indicators.
"This decline in the dollar index and bond yields has been aided by lower-than-expected CPI inflation in the United States, reigniting optimism for additional Fed rate reduction this year. The prospect of an end to the violence in Gaza is another significant comfort. This global backdrop is positive for the market," he stated.
UBS stated US President Trump's policy plan, if implemented in its full, would have major macroeconomic consequences. However, budgetary and political restrictions are likely to result that adopted policies may fall short of campaign promises in some cases.
The BSE Sensex increased 188.28 points, or 0.24 percent, to 77,261.72. The NSE Nifty was at 3,421.65, up 76.90 points, or 0.33 percent. "There is also the consideration that the President may escalate to deescalate, with some of his proposals likely to prove to be negotiating tactics," according to UBS.
UltraTech Cement gained 2.22 percent to Rs 10,859.75. Sun Pharma rose 1.14 percent to Rs 1,796.10 ahead of third-quarter earnings, while HCL Tech, Tata Motors, and Nestle India all rose 0.80 percent. Bajaj Finserv, L&T, and Infosys were among the Sensex gainers.
Zomato shares slid 7% to Rs 224.05. This was in addition to a similar fall during the prior session. Macquarie predicts a 44% drop from Monday's closing price, citing Zomato's December quarter earnings that were lower than consensus and projections, driven by investments in Blinkit and greater staff expenses. Macquarie believes Zomato is an efficient quick commerce and meal delivery platform, but the shares have a limited margin of safety.
ITC increased by 0.72 percent to Rs 440.90. Nuvama Institutional Equities believes there is little chance of a significant increase in cigarette tax in the Budget because a tiny tax hike was implemented last year and legal cigarette sales are gradually returning despite an urban downturn.
