Indian equity markets staged a modest recovery during Friday's trading session, putting a halt to a series of declines. The benchmark indices, the S&P BSE Sensex and the Nifty50, opened in positive territory, offering some respite to investors after a volatile week.
Market Snapshot: A Tentative Recovery
At 9:17 AM, the Nifty50 was trading at 25,922.45, marking a gain of 46 points or 0.18%. Similarly, the BSE Sensex stood at 84,327.52, up by 147 points or 0.17%. This upward movement came after a sharp correction in the previous session, which was largely triggered by fears of aggressive US trade actions.
Despite the morning gains, market sentiment remains cautious. Analysts believe Indian equities are likely to face continued pressure in the near term. Key concerns include potential tariff actions by the Donald Trump administration, persistent geopolitical tensions, and subdued signals from global markets.
All Eyes on the US Supreme Court Verdict
The day's trading is heavily influenced by an impending decision from the United States Supreme Court. The court is expected to rule on the legality of tariffs imposed by former President Donald Trump. This verdict is seen as a critical event for Indian markets.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided his perspective. He stated that following yesterday's sharp correction—sparked by the possibility of about 500% tariffs on India under the Russia Sanctioning Act—the market's focus has shifted to the Supreme Court's decision. "There is a high probability of the verdict going against Trump. But the details are significant," he noted.
Dr. Vijayakumar emphasized that the market's reaction will hinge on whether the court partially strikes down the tariffs or declares them entirely illegal. "If the Supreme Court declares Trump tariffs illegal, there would be a rally in India since India has been the worst affected by the 50% tariffs," he added.
Investment Strategy and Broader Market Trends
Dr. Vijayakumar also pointed out that the recent market pullback has impacted even stocks that are not directly vulnerable to US trade policies. He suggested that segments like financials, consumer discretionary, and industrials, which corrected due to overall market weakness, present accumulation opportunities for long-term investors.
The global backdrop was mixed. Overnight, US stocks closed without a clear direction. Technology shares, including Nvidia, faced selling pressure. In contrast, defence stocks advanced after President Trump called for a significantly higher military budget of $1.5 trillion.
In Asia, markets opened marginally higher on Friday, attempting to recover from a two-day decline. Investors were positioning themselves ahead of the crucial US non-farm payrolls data and the awaited Supreme Court ruling.
Investor flows on Thursday reflected the prevailing caution. Foreign portfolio investors (FPIs) were net sellers, offloading equities worth Rs 3,367 crore (provisional data). However, domestic institutional investors (DIIs) provided a counterbalance by purchasing shares worth Rs 3,701 crore, offering crucial support to the market.
