Markets end in green despite Trump tariffs; DII buying lifts sentiment

Business Standard

3 days ago

Domestic markets recovered from three-month lows to close higher on Thursday, buoyed by strong buying from domestic institutional investors (DIIs) and optimism over an upcoming summit between US President Donald Trump and Russian President Vladimir Putin. The US's decision to double tariffs on Indian goods — in response to India's continued purchase of Russian energy — dampened investor sentiment earlier in the day. The Sensex fell nearly 1 per cent during the session, hitting an intraday low of 79,811 — its weakest level since May 9. However, it rebounded to close at 80,623, gaining 79 points (0.1 per cent). The Nifty also dropped to a three-month low of 24,344 before recovering to end at 24,596, up 22 points (0.09 per cent). The total market capitalisation of BSE-listed companies rose by Rs 16,000 crore to Rs 445.4 trillion. The gains were driven by strong domestic flows, with DIIs pumping in Rs 10,864 crore into equities — their highest single-day purchase since April 7. By contrast, foreign portfolio investors (FPIs) offloaded shares worth Rs 4,997 crore. Markets also found support from diplomatic developments. Russia announced it had agreed with the US on a venue for the Putin-Trump meeting and had initiated discussions on key issues, following a recent interaction between Putin and Trump's envoy, Steve Witkoff. Global markets rallied on hopes of a potential truce in the Russia–Ukraine conflict, and possibly a softening of Trump's stance on countries like India that continue to buy Russian energy. The US views such purchases as supporting the Russian economy and delaying efforts to end the war, which is now entering its fourth year. On Tuesday, Trump accused India of fuelling Russia's war efforts and imposed an additional 25 per cent tariff, escalating trade tensions after months of negotiation. The tariffs come just ahead of an August 8 deadline set by Trump for Russia to reach a peace agreement with Ukraine. 'Optimism around a potential India–US trade settlement is boosting sentiment, with a 20-day window still open for negotiations. We expect the market to stay range-bound, closely tracking developments on the US–Russia peace talks, India's response to US tariffs, and the domestic earnings outlook,' said Siddhartha Khemka, Head of Research – Wealth Management, Motilal Oswal Financial Services. Market breadth was weak, with 2,297 stocks declining and 1,751 advancing on the BSE. HDFC Bank, up 0.6 per cent, was the top contributor to the Sensex's gains, followed by Eternal, which rose 0.9 per cent. Brent crude traded higher at $68.2 a barrel, gaining 0.6 per cent. 'Nifty managed to hold above the 24,450 support level at close, reaffirming its strength as a key floor — the lower boundary of the previous consolidation range that led to the rally. A decisive move above 24,800 could pave the way for a further rebound toward the 25,000 mark,' said Ajit Mishra, Senior Vice-President – Research, Religare Broking.