Sensex, Nifty Bounce Back on US Tariffs Delay

Mumbai, Feb 4 (PTI) Equity benchmark indices Sensex and Nifty bounced back sharply in early trade on Tuesday in line with a recovery in Asian peers after US President Donald Trump delayed tariffs on Mexico and Canada for a month.

Imposition of tariffs on Canada, Mexico and China by the Trump administration fanned fears of trade war and had resulted in markets' decline on Monday.

Vikas Jain, Head of Research at Reliance Securities, said, US President Donald Trump has delayed tariffs on Mexico and Canada for a month.

"This move, along with a cooling trade war, strong domestic manufacturing PMI data, and the Finance Minister's announcement in the Union Budget — especially the zero tax up to Rs 12 lakh on the new tax regime—has likely boosted market sentiment," Jain added.

On Saturday, the White House announced that Trump was implementing a 25 per cent additional tariff on imports from Canada and Mexico and a 10 per cent additional tariff on imports from China.

The 30-share BSE benchmark Sensex jumped 552.6 points to 77,739.34 in early trade. The NSE Nifty climbed 173.15 points to 23,534.20.

From the 30-share blue-chip pack, Infosys, Tata Motors, Larsen & Toubro, Mahindra & Mahindra, Adani Ports, State Bank of India, ICICI Bank and Tata Steel were the major gainers.

Power Grid, Hindustan Unilever, Nestle and Asian Paints were among the laggards.

"The decline in the dollar index to 108 is a positive development. Emboldened by the excellent Budget, investors, especially DIIs, are likely to step up investment, particularly in discretionary consumption segments," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

In Asian markets, Seoul, Tokyo and Hong Kong also bounced back and were trading higher.

US markets ended lower on Monday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,958.37 crore on Monday, according to exchange data.

Global oil benchmark Brent crude dipped 0.50 per cent to USD 75.58 a barrel.

The BSE bellwether index declined 319.22 points or 0.41 per cent to settle at 77,186.74 on Monday, snapping its five-day rally. The Nifty declined 121.10 points or 0.52 per cent to 23,361.05.