Indian Market Makes Historic Recovery, Investors Gain Rs 10.9 Lakh Crore

In an unprecedented turn of events, the Indian stock market made a remarkable recovery on Tuesday, April 15, as investors regained a colossal Rs 10.9 lakh crore in a single day. This recovery effectively wiped out the losses incurred following the US tariff shock on April 2, marking a significant milestone in the financial sector.

The Sensex, a benchmark index of the Bombay Stock Exchange, witnessed a surge of over 1,570 points, while the Nifty, the National Stock Exchange’s benchmark index, soared past the 22,300 mark. This marked one of the most substantial gains in recent months, reflecting a robust and resilient market.

The Broad-Based Recovery and Its Drivers

This recovery was not limited to a specific sector or a handful of stocks. Instead, it was broad-based, encompassing various sectors and indices. The driving force behind this rally was a combination of strong investor sentiment, positive global cues, and domestic optimism. The primary catalyst for this rally was a significant update on US trade policy.

The US administration announced a 90-day delay in tariffs for most countries, with the notable exception of China. This announcement served to calm investor nerves and reignite hopes for India’s position in global supply chains.

Financial stocks, due to their heavy weightage in the indices, led the charge, rising over 2 per cent. The midcap and smallcap indices, which had been underperforming recently, also saw a strong recovery, each rising by around 3 per cent. Market experts noted that domestic institutional investors turned aggressive buyers on Tuesday, further supporting the upward momentum. Asian markets were also firm, supported by a weaker US dollar and stable bond yields, giving Indian markets an additional boost as they reopened after an extended weekend.

India’s Position Amid Tariff War

India’s strong macroeconomic fundamentals continue to attract investor interest, apart from global cues. With robust domestic demand and limited direct exposure to US-China tensions, India is increasingly seen as a stable bet amid global uncertainties, market experts noted. While data on foreign institutional investor flows is yet to be released, early signs point to strong buying activity.

“Markets are adjusting the new reality of daily Trump twists and turns,” said Vikas Gupta, CEO and Chief Investment Strategist at OmniScience Capital. He added that sometimes when tariffs look like they have been temporarily removed, the markets will react positively, when something unexpected happens they will react negatively.

Trump’s Surprise Tariff Pause Spares China; India Welcomes Relief

US President Donald Trump has announced a pause on the implementation of most of his reciprocal tariffs. He explained the decision by saying that people were “getting yippy and a little bit afraid.”

The pause lowers tariffs to 10 per cent and applies to imports from all trading partner countries that have not imposed retaliatory levies on American goods. This includes over 75 countries that have opted to negotiate with the administration, such as India, which is currently in talks with the US over a Bilateral Trade Agreement.

However, China stands out as a major exception to this sudden shift. In response to China’s retaliatory levy of 84 per cent on American goods, Trump has increased tariffs on Chinese imports to a staggering 125 per cent. The announcement, made via a post on Truth Social, rattled already-volatile markets. Yet, in a dramatic turnaround, markets surged shortly afterward, with the tech-heavy Nasdaq soaring to a two-decade high.

Trump’s decision to halt most tariffs reportedly caught even his own officials off guard. When asked about the abrupt policy reversal, Trump repeated that people were getting “yippie and a little bit afraid,” adding, “You have to be flexible,” when pressed further.

Trump’s Tariff Reversal and Market Reactions

Despite early declarations from top aides that the levies were non-negotiable, Trump had signaled a willingness to negotiate when first introducing the tariffs. He moved ahead with the pause on Wednesday morning.

Since the reciprocal tariffs went into effect, US markets have been in turmoil. Calls for a 90-day pause have come from key Wall Street voices, including Bill Ackman. Trump has also encountered pushback from key advisor Elon Musk, who criticized the tariffs and engaged in a public spat with Peter Navarro, one of the President’s main trade advisors.

Following the announcement, Asian markets rebounded significantly. Japan’s Nikkei share average surged as investors scooped up battered stocks, echoing gains on Wall Street, where the S&P 500 jumped 9.5%—its biggest daily gain since 2008. Analysts at Morgan Stanley described Trump’s move as bullish for Asian equities, and especially so for Japanese stocks.

EU, China in Talks

Meanwhile, the European Union has called for restraint. Commission President Ursula von der Leyen emphasized the importance of avoiding further escalation in a phone call with Chinese Premier Li Qiang. In response, China expressed confidence in its ability to weather the economic pressure.

In India, markets unsettled by recent tariff news may find relief in the pause. The decision also gives New Delhi a window to finalize its deal with the US and prepare for any future tariff actions. India has not retaliated against Trump’s 26 per cent levy and has remained engaged in negotiations, as have nearly 70 other nations.

The tariff pause has also prompted Goldman Sachs Group economists to retract a recent recession forecast. Initially projecting a 65% chance of a recession within 12 months due to the tariffs, they have since reverted to their earlier baseline prediction of no recession following Trump’s announcement.

Indian Shares Poised for Higher Opening as Key Earnings Reports Awaited

Indian stock markets are expected to open slightly higher on Monday, with investor attention focused on earnings reports from major players like HDFC Bank, Kotak Mahindra Bank, and Tech Mahindra.

As of 07:14 a.m. IST, the Gift Nifty stood at 24,927.5, indicating that the NSE Nifty 50 index may open marginally above its last close of 24,854.05 on Friday. Both the NSE Nifty 50 and S&P BSE Sensex had posted losses in the previous week, marking the third consecutive week of declines.

Analysts attributed the recent market downturn to sustained foreign outflows as investors shifted focus toward China, where stimulus measures and cheaper stock valuations are drawing attention. Additionally, the ongoing mixed corporate earnings season has added to market caution.

The reaction to HDFC Bank’s earnings, a key component of India’s benchmark indexes, will likely influence Monday’s trading. The private lender reported a higher-than-expected standalone net profit for the September quarter and plans to reduce its loan-to-deposit ratio over the next two to three years.

Meanwhile, Kotak Mahindra Bank may face selling pressure due to a sequential margin contraction and deterioration in asset quality for the second quarter. Tech Mahindra, which reported revenue growth over the weekend, will also be closely watched by market participants.

Foreign institutional investors have been net sellers of Indian equities for 15 consecutive sessions, offloading shares worth ₹54.86 billion ($652.7 million) on Friday. October is shaping up to be the worst month for the Nifty since September 2022, with the index down 3.7% so far.

Stocks to Watch:

  • JM Financial: The Reserve Bank of India has lifted restrictions on one of its units.
  • Tata Steel: The steelmaker signed a contract with Italy’s Tenova for an electric arc furnace at its Port Talbot plant in Wales.
  • JSW Steel: JSW’s joint venture with JFE Steel Corp announced a deal to acquire thyssenkrupp Electrical Steel India for $482.1 million.

With 25 Deals at $1.3 Bln, India Records Historic High in Real Estate in July-Sept 2024

India’s real estate sector achieved an unprecedented milestone in the July-September quarter (Q3), with 25 deals valued at $1.3 billion, according to a report by Grant Thornton Bharat released on Monday. This marks the highest number of deals ever recorded in the sector and the second-highest total value since Q2 2023.

The surge in deal values was primarily driven by activities related to qualified institutional placements (QIPs), as well as private equity funding in both residential and commercial segments, including real estate technology firms.

While Q3 experienced a 71% drop in overall private equity (PE) and mergers and acquisitions (M&A) deal values compared to Q2 2024, deal volume saw a slight increase of 5%. Year-over-year comparisons indicate a 54% rise in deal volumes, although values declined by 41% compared to Q3 2023.

During this quarter, there were three inbound deals in property development and two outbound deals in the student housing and online rental platform sectors. PE activity remained robust, with 12 deals totaling $401 million, maintaining consistent volume with Q2 2024. Notably, the two largest deals accounted for $346 million, reflecting a trend of concentrated value in fewer transactions.

Despite the decline in funding values from Q2 2024, Q3 2024’s deal values surpassed those recorded in both Q1 2024 and Q3 2023. Additionally, one initial public offering (IPO) raised $49 million, in line with previous quarters, while QIPs experienced a remarkable surge with four deals amounting to $940 million—a nearly six-fold increase compared to Q2 2024.

The strong QIP activity underscores a growing confidence in real estate firms’ ability to tap into public markets. The report suggests that renewed PE and M&A activity toward the end of Q3 could signal an uptick in momentum heading into Q4 2024.

Market Plunges as Middle East War Looms, Rs 10 Lakh Crore Wiped Out from Investors

Indian markets were hit hard on Thursday as escalating geopolitical tensions in the Middle East led to a sharp decline in equity indices, wiping out Rs 10 lakh crore in market capitalization.

The benchmark BSE Sensex nosedived 1,769 points (2.10%), closing at 82,497, while the Nifty 50 plunged 546 points (2.12%) to 25,250. This broad sell-off led to significant losses across sectors, with nearly 2,864 stocks ending in the red compared to just 1,120 gaining stocks.

The fallout from the day’s trading session saw the combined market value of all listed companies on the Bombay Stock Exchange (BSE) plummet by Rs 10 lakh crore, dropping to a total of Rs 465 lakh crore.

Broader Market Impact

The rout was not limited to blue-chip stocks, as midcap and smallcap segments also suffered steep losses. The Nifty Midcap 100 index fell by 1,333 points (2.21%) to 59,024, while the Nifty Smallcap index dropped 378 points (1.96%) to 18,952, indicating widespread bearish sentiment.

Sector-wise, almost all major NSE indices were deeply in the red, with Auto, Financial Services, IT, FMCG, Realty, Energy, Private Banks, and Infrastructure taking the hardest hits.

Top losers on the Sensex included L&T, Axis Bank, Tata Motors, Reliance, Maruti Suzuki, Bajaj Finance, Wipro, and Kotak Mahindra Bank. JSW Steel was the only stock to buck the trend, ending in the green.

Geopolitical Tensions and Domestic Factors

According to market analysts, the sharp downturn was primarily driven by the escalating conflict in the Middle East, particularly following Iran’s ballistic missile attacks on Israel. Fears of an intensifying conflict could potentially push up global oil prices, raising inflationary concerns.

Additionally, domestic factors played a role. New SEBI regulations in the Futures and Options (F&O) segment created uncertainty, leading to concerns over reduced trading volumes and liquidity. With foreign institutional investors (FIIs) also shifting their focus to more attractively valued markets such as China, the pressure on Indian stocks increased.

On October 1, FIIs sold equities worth Rs 5,579 crore, while domestic institutional investors (DIIs) purchased Rs 4,609 crore worth of equities, offering some support to the market.

Future Scenario

Market experts warn of further volatility in the coming days. The escalating Middle East conflict could cause oil prices to rise further, adding to inflationary pressures that could weigh on the Indian economy. At the same time, domestic factors, including SEBI regulations and foreign fund outflows, will continue to impact market sentiment.

With global geopolitical and economic uncertainties mounting, investors are bracing for a turbulent period in the markets.

Gloom All Over Markets, Sensex Down 589 Points; Middle East Conflict Rattles Globe

The escalating conflict in the Middle East, particularly between Iran and Israel, has sent shockwaves through global markets, with India feeling the tremors. The Nifty 50 index and the S&P BSE Sensex, key indicators of the Indian stock market, have both seen a decline of over 1%.

At 9.38 a.m., Sensex was down 589 points or 0.69 per cent at 83,686 and Nifty was down 174 points or 0.68 per cent at 25,622. In the early trading hour, broader market trends remained weak. On the National Stock Exchange (NSE), 256 shares were in the green and 1,188 shares were in the red.

Twenty-eight out of 30 Sensex stocks were trading in the red as Wipro, Asian Paints, Tata Motors, M&M, Maruti Suzuki, Reliance, Nestle, ICICI Bank, Titan, TCS, L&T, HUL, Kotak Mahindra Bank, HDFC Bank, Bajaj Finserv, HUL, Axis Bank and Bajaj Finance were the top losers. Only JSW Steel and Tata Steel were in the green.

Among the sectoral indices, Auto, FMCG, realty, media, energy and pvt bank were major gainers. Only the metal index was in the green. This is in line with the performance of Asian peers, which are down by 1.5%. The geopolitical tensions have left investors on edge, as any escalation could have far-reaching implications for the global economy, particularly for countries like India that are heavily reliant on oil imports.

The Middle East is a significant player in the global oil market, and any disruption in the region can lead to a spike in oil prices. This is a major concern for India, which is a significant importer of oil. Raghvendra Nath, managing director at Ladderup Wealth Management, highlighted this concern, stating, “Investors are worried about the Middle East conflict right now as it will have a huge bearing on Indian markets since any rise in oil prices will have an adverse impact on the country, which is an importer of the commodity.”

The impact of the conflict is not limited to the oil sector. Twelve of the 13 major sectoral indexes in India logged losses, with realty and auto indexes set to be the top losers by percentage, dropping about 2.6% and 1.7%, respectively. Among individual stocks, consumer goods firm Dabur lost 5.5% after forecasting its first quarterly revenue decline since 2020. Most brokerage stocks, such as Motilal Oswal Financial Services and 5Paisa Capital, fell about 1.5% each, while SMC Global lost about 2.3%.

Geopolitical Tensions and Global Oil Prices

The geopolitical tensions have also had an impact on oil prices. Crude oil prices slumped to their lowest since December, extending a steep fall of more than 4% in the previous day, amid concerns over lower global demand growth. Brent crude futures for November fell 0.53% to $73.36, after the previous session’s fall of 4.9%. US West Texas Intermediate crude futures for October were down 0.63% at $69.90, after dropping 4.4% on Tuesday. Analysts believe that oil fundamentals are deteriorating sharply, even as the market obsesses about potential supply shocks.

The geopolitical tensions have also affected gold prices. Gold prices climbed one per cent as the dollar and Treasury yields retreated following Federal Reserve Chair Jerome Powell comments signalling an interest rate cut in September. This indicates that investors are seeking safe-haven assets amid the geopolitical uncertainty.

The geopolitical tensions have also had an impact on the economies of West Africa. The upward trend in the cost of goods and services is estimated to continue for the rest of the year. The government has a year-end inflation target of 21.4%. This is highly optimistic and may not be achieved, especially if policy implementation lags are considered. In addition, for a country that is highly import-dependent, the role of the exchange rate cannot be overemphasized.

Impact on Indian Economy and Policy Responses

The geopolitical tensions have also had an impact on the Indian budget. The government projected an expenditure of Rs 47.65 lakh crore for 2024-25, marking a 6 per cent increase over the revised estimate for 2023-24. Interest payments constituted a significant portion, with 25 per cent of the expenditure earmarked for interest payments, accounting for 40 per cent of revenue receipts. Revenue growth, excluding borrowings, were expected to rise by 12 per cent to Rs 30.80 lakh crore in 2024-25, driven largely by a 12 per cent increase in tax revenue.

The geopolitical tensions have also had an impact on the global banking sector. Following a record showing in 2022, the global banking sector continued to exceed expectations during 2023. Global return on tangible equity reached 13 percent in 2023, its highest level since the 2008 financial crisis. Meanwhile, the worldwide Tier 1 ratio hit a ten-year high of 13.4 percent, and net interest margins rose to 2.4 percent, snapping a decade-long contraction.

Long-term Impact and Market Outlook

The geopolitical tensions have also had an impact on South Asia. The Iranian retaliation to the attack by Israel on its embassy in Syria in the form of a barrage of missile attacks threatens a negative impact beyond the region, especially in nearby South Asia which has historical, cultural, religious and economic ties with the Middle-East.

Israel’s attack on the Iranian embassy was a clear violation of diplomatic norms. Yet, the attack elicited no condemnation from Israel’s Western allies, in line with similar silence on Israel’s genocidal six-month war in Gaza. Similarly, in the United Nations they condemned Iran’s attacks, on the premise of self-defense, as disproportionate.

Sensex down by 300 points, Israel’s return attack fears grip markets

BSE Sensex is down by more than 300 points on Tuesday after a plunge of 845 points on Monday, continuing the declining trend amid concerns about general elections, geopolitical factors, and uncertainty in the markets.

Sensex is trading at 73,040 points, down by 358 points. Sensex is on the verge of falling below the 73K mark if the weakness persists. IT and financials are trading weak with Infosys, Bajaj Finserv, Indusind Bank, Ultratech Cement, L&T down more than 1 per cent.

Analysts expect economic and geopolitical issues to continue to weigh on markets in the near term. The economic factor is the rising US bond yields which reduces the prospects of rate cuts by the Fed this year. High bond yields are negative for risky assets like equity and will accelerate FII selling in emerging markets like India, they said.

Essentially the market is more concerned about the geopolitical issue.

Israel military chief vowed that “there will be a response to Iran’s attack on Israel” and it has increased the probability of escalation of tensions in the Middle East, evolving into a bigger scale.

As investors seek to wait and watch the developments. high quality large-caps are on corrections to make them fair. Large-caps in banking, IT, autos, capital goods, oil & gas and cement are advised as ideal for long-term investment, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.

Sensex, Nifty tank lower, midcaps see sharper decline

The Nifty hit a new low, marking its lowest point in over a month, as it closed down by 1.08 percent or 238.3 points at 21,817.5 on Tuesday.

Trading volumes in the NSE cash market were modest at Rs. 0.83 lakh crore. Despite the negative advance-decline ratio at 0.36:1, the midcap index experienced a sharper decline compared to the Nifty.

In Asia, stock performance was mixed on Tuesday following the Bank of Japan’s decision to raise its benchmark interest rate for the first time in 17 years, signaling the end of its long-standing negative rate policy. This move by the Bank of Japan marks the termination of the world’s final negative interest rate policy in the country.

Analysts pointed out a breach of the Nifty’s support level at 21,745 could potentially intensify the downward trend, while resistance might be encountered around 21,905. The next significant support levels to monitor are around 21,500 within the next week. Any upward movement towards 22,000 could present a selling opportunity, they advise.

After a long period of consolidation, the Nifty experienced a significant downward breakout on Tuesday, closing lower by 238 points. From the opening bell, the market displayed weakness throughout the session on Tuesday. It may further decline shortly, analysts said.

 

Interest rates on small savings schemes remain unchanged

The government-run small savings schemes remained to provide the same interest rates since the past two years though the bank fixed deposit rates have considerably increased the interest rate.

The small savings schemes’ interest rates were last revised in the first quarter of 2020-21, though banks have drastically hiked their home loan and term deposit rates after the Reserve Bank of India (RBI) raised its repo rate by 140 basis points since May 2022.

Small savings schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), Post Office Savings Scheme and Sukanya Samriddhi Yojana are vital savings instruments for the common man, as they provide long-term benefits.

Here are the current interest rates of key small savings schemes:

* Public Provident Fund (PPF): 7.1 per cent

* National Savings Certificate (NSC): 6.8 per cent

* Post Office Monthly Income Scheme: 6.6 per cent

* Sukanya Samriddhi Yojana: 7.6 per cent

* Five-year Senior Citizens Saving Scheme: 7.4 per cent

* Kisan Vikas Patra: 6.9 per cent

 

The RBI had brought down its benchmark repo rate by 75 basis points to 4.40 per cent on March 27, 2020 — just three days after a nationwide lockdown was announced but the government had not reduced interest rates of small savings schemes, keeping in mind the interests of the pensioners.

RBI sources said the government will monitor inflation as well as the liquidity position before taking any decision to raise interest rates of small savings schemes. “Depending on how much inflation rises and whether there is tightening of liquidity position in future, the government may take a call on small savings schemes rates,” said a senior banking official told IANS.

On June 30, 2022, the Finance Ministry had notified that interest rates of small savings schemes have been kept unchanged for the July-September quarter of the current fiscal, effective from July 1.

“The rates of interest on various small saving schemes for the second quarter of the financial year 2022-23, starting July 1, and ending September 30, shall remain unchanged from those notified for the first quarter (April 1 to June 30) for FY 2022-23,” the Finance Ministry notification had said.

Aajeevika Grameen Express Yojana (AGEY) to be Launched

The Government of India has decided to launch a new sub-scheme named “Aajeevika Grameen Express Yojana (AGEY)” as part of the Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM). The Self Help Groups under DAY-NRLM will operate road transport service in backward areas. This will help to provide safe, affordable and community monitored rural transport services to connect remote villages with key services and amenities (such as access to markets, education and health) for the overall economic development of backward rural areas. This will also provide an additional avenue of livelihood for SHGs. The basic outline of AGEY was discussed in a meeting of State Transport Ministers of 13 States held in June 2016 at Dharamshala, Himachal Pradesh and all the Transport Ministers had expressed their appreciation of this initiative.

The Community Investment Fund (CIF) provided to Community Based Organization (CBOs) under DAY-NRLM will be utilized to support the SHG members in this new livelihoods initiative. The beneficiary SHG member will be provided an interest free loan by the CBO from its Community Investment Fund upto Rs.6.50 lakh for purchase of the vehicle. Alternative, CBO will own the vehicle and lease it to an SHG member to operate the vehicle and pay lease rental to the CBO

AGEY will be initially implemented in 250 Blocks in the country on pilot basis with each Block provided upto 6 vehicles to operate the transport services. During the current year implementation of the scheme has been so far approved for 52 Blocks in 8 States namely Andhra Pradesh, Jharkhand, Maharashtra, Tamil Nadu, Telangana, Uttarakhand and West Bengal with a total provision of Rs.16.06 Crore of which the Government of India share would be Rs.10.16 Crore. The balance funding would be provided by the respective States.

The Blocks will be selected by States from among the Blocks where NRLM is being implemented intensively and where mature CBOs are already functioning. Backwardness, lack of transportation links and sustainability of service would be the guiding factors in the selection of Blocks and routes.

The State Rural Livelihood Missions (SRLMs) will do a feasibility study and traffic survey in the selected blocks to identity the routes and the number and capacity of vehicles which can be operated on sustainable basis. The study will be conducted by technically sound organizations with expertise in transport network planning. The choice of vehicle could be either e-riksha, 3 wheeler or 4 wheeler within a cost ceiling of Rs.6.50 lakh.

The SRLMs will be co-ordinating with State Transport Department for issue of permit for the vehicle. The SHG member operating the vehicle shall ensure that all necessary legal and statutory requirement such as valid permit, road tax permit, valid insurance policy etc. are met.

The SHG member shall run the vehicle on approved routes at pre-determined frequency as jointly agreed between the CBO and the SHG operator based on financial viability and the need for transport link.

All vehicles under the scheme shall have a defined colour code and carry AGEY branding to ensure their identity and avoid diversion to other routes.

The State Rural Livelihood Mission will arrange capacity building for their staff at State, District and Block levels for operating the Scheme. The members of the CBO and the beneficiary SHG member shall also be provided adequate training in the Rural Self Employment Training Institutes (RSETIs) and other partner organizations.