Sensex Up 200 Pts Following Flat Opening; Financial, Telecom Stocks Gain

Nifty and Sensex opened on a cautious note on February 25 amid heightened FII outflows and weak global cues. However, the equity market recovered after strong gains in banking and telecom stocks.

Wall Street witnessed overnight losses, buoyed by concerns over U.S. trade policies. President Donald Trump’s comment, “on time and on schedule” on tariff measures on Canada and Mexico, along with his decision to curtail Chinese investments in certain sectors downplayed investor sentiments.

As of 10:00 am, Sensex tumbled 245 points to 74,699, while the Nifty gained 45 points to 22,599. The benchmark indices have declined 14% from their record-highs in Septmeber last year and are en route to witness their fifth consecutive month of losses—the longest losing streak since 1996.

Amit Pabari, MD at CR Forex Advisors said, “The dollar index showed resilience gaining strength as U.S. President Donald Trump reaffirmed that tariffs on Mexico and Canada would move forward. This announcement has reignited trade war fears, adding volatility to global markets.”

He said, “Meanwhile, the ongoing G7 meeting has exposed divisions among member nations, as they struggle to agree on a joint statement addressing the Russia-Ukraine war. With the disagreements over energy sanctions and handling Russia’s aggression have intensified tensions between the U.S. and Europe.”

BSE Midcap and BSE Smallcap indices soared 0.3% and 0.5% respectively.

Among the early gainers, banking and auto provided some cushion, while Nifty IT and Nifty Metal indices dipped 0.3% each.

The IT index came under heat over concerns of declining growth in the U.S. Notably, a significant portion of the Indian IT companies come from the U.S. Inflation expectations have also surged amid Trump’s trade policies.

Shares of L&T, Sun Pharma, Hero MotoCorp, Coal India, and Hindalco fell between 1% to 2.5% respectively. However, Adani Ports, Bajaj Finance, Bharti Airtel, Bajaj Finserv, and M&M gained between 1-2%.

On the technical front, Hardik Matalia, Derivative Analyst at Choice Broking said, “The index (Nifty) had been consolidating and attempting to rebound, but the failure to sustain its recovery led to a breakout on the downside.”

Matalia believes that immediate resistance can be seen at 22,650 and 22,800, while adding that a decisive close above these levels is potent enough to cause an uptick at 23,000 and 23,250. On the downside, key support levels stand at 22,400 and 22,125.