A day after declining by over 1.5% due to nervousness over US President Donald Trump’s looming reciprocal tariffs, Indian stock markets put up a brave face on Wednesday, with benchmark indices bouncing back and erasing over half the losses incurred earlier in the week. The rupee, on the other hand, closed a little weak, depreciating by 5 paise, or 0.6%, to close at 85.51 against the dollar, as foreign institutional investors (FIIs) were net sellers in equities for the third consecutive trading session.
The Sensex rose 592.93 points, or 0.78%, to close at 76,617.44, while the Nifty gained 166.65 points, or 0.72%, ending the day at 23,332.35. Outperforming the benchmarks, the broader indices ended with higher returns. The BSE Midcap rose 1.38%, while the BSE Smallcap gained 0.99%.
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Among their Asian peers, markets in China, Japan and Hong Kong ended roughly flat on Wednesday. China’s blue-chip CSI 300 Index ended lower by 0.1% and the Shanghai Composite Index rose 0.1%, while the Hong Kong benchmark Hang Seng was unchanged. Japan’s Nikkei finished up 0.28% after swinging between gains and losses during the day.
In India, foreign portfolio investors net sold shares worth Rs 1,538.88 crore, whereas domestic institutional investors net purchased shares worth Rs 2,808.83 crore on Wednesday, according to provisional BSE data.
Amit Jain, co-founder of Ashika Global Family Office Services, said, “For India, this (the tariff) could mean short-term volatility in equity markets, especially in export-driven sectors like automobiles, pharmaceuticals, and IT. While selective large-cap stocks from these sectors may face pressure due to tariff headwinds, India’s strong domestic consumption story remains intact, offering resilience.” He added that investors should brace for fluctuations but focus on long-term opportunities in sectors less impacted by global trade tensions.
The rupee, which had hit a low of 85.73/dollar during the day, closed at 85.51.
“The rupee was the regional outperformer, rallying 2.3% in the past month, as seasonality and dollar weakness coincided. Breaking into the 85.0/dollar range, the currency benefited from a resumption in foreign inflows into the equity and debt markets, helped also by a likely current account surplus in CY-1Q25,” said Radhika Rao, executive director and senior economist, DBS Bank. However,
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