The US Federal Court's decision to deem Donald Trump's liberation tariffs unconstitutional and subsequently impose an injunction has visibly impacted global markets. Following this ruling, Asian markets, along with the Indian stock market, experienced a surge in activity.
Stock Market: The US court's decision declaring the Trump-era tariff law unconstitutional and halting its enforcement has injected enthusiasm not only into the US but also into global markets. This positive sentiment was clearly visible on Thursday in the Indian stock market, with both the Sensex and Nifty witnessing significant gains. Investor interest, particularly in IT and technology stocks, increased, leading to widespread buying.
Asian Signals Provide Support, Sensex Jumps 400 Points
On Thursday, the BSE Sensex opened at 81,734.67, up 422 points, while the NSE Nifty touched 24,825.10, up 114 points. Although the market relinquished some gains during the day, the Sensex still closed at 81,312.32, up 239.31 points from the previous session. The Nifty closed at 24,752.45, reflecting a gain of 73.75 points.
Experts believe the US court's decision signals immediate relief for the market. Investors hope this might ease global trade disputes, benefiting Indian exporters.
Court's Decision Boosts Global Markets
The US Federal Court declared the reciprocal tariffs imposed by the Trump administration unconstitutional and issued an injunction. The court stated that the decision was outside the President's authority and that the policy violated trade freedom. Following this decision, Japan's Nikkei index rose by 1.16%, while South Korea's Kospi climbed 1.07%. US S&P futures also saw a 1.44% increase, and Nasdaq 100 futures rose by 1.76%.
The Indian market on Thursday saw the most significant gains in IT, pharma, and mid-cap stocks. Major IT stocks like TCS, Infosys, Wipro, and Tech Mahindra saw increases ranging from 1.5% to 2.8%. The pharma sector also witnessed b buying, with Sun Pharma, Cipla, and Dr. Reddy's shares experiencing significant gains. Experts suggest that the potential easing of US trade policies could benefit Indian IT companies, which provide large-scale outsourcing services to the US.
Market Decline on Wednesday
It's noteworthy that the market had declined for the second consecutive day on Wednesday. The Sensex closed at 81,312.32, down 239 points, and the Nifty fell 73 points to close at 24,752.45. Selling pressure in ITC and auto sector stocks weighed on the market. ITC's share price fell following news of British American Tobacco reducing its stake, while the auto sector also showed sluggishness.
Vinod Nair, Research Head at Geojit Financial Services, notes that while uncertainty regarding US tariffs has been temporarily alleviated, declining Foreign Institutional Investor (FII) participation and high valuations of stocks remain challenges for the market.
