The Indian equities market bounced back strongly on Tuesday, giving indications of a rebound after witnessing a dramatic collapse in Monday’s trading session. Benchmark indices BSE Sensex and NSE Nifty50 started trading on a robust note, reflecting the optimistic sentiment among investors amid prevailing global fears.
At 11:08 AM, the BSE Sensex was trading at 73,875.49, up 738 points or 1.01%, while the Nifty50 stood at 22,404.85, up 243 points or 1.10%. This upward move comes as a breather for investors after a series of losses triggered by global trade tensions.
Top Gain Leaders: Infosys, SBI, Titan Among Top Gainers
A handful of blue-chip stocks joined the rally, including top gainers at the BSE such as Titan Company, Infosys, State Bank of India (SBI), Asian Paints, and Bajaj Finance. These stocks contributed significantly to the indices’ gains. However, interestingly, Power Grid was the only stock that went into the red among the Sensex pack during the same period.
Global Trade Tensions Fuel Market Jitters
The sharp fall on Monday was largely due to rising global trade tensions, especially between China and the United States. The US government’s move to impose new tariffs caused a global market shock. Investors responded with increased wariness, expecting a prolonged period of volatility and uncertainty.
The current global mayhem, as Dr V K Vijayakumar, Chief Investment Strategist of Geojit Financial Services, opines, is likely to continue for a while. “This is more of a US-China trade war. The EU and Japan have chosen to talk. India has also launched talks for a Bilateral Trade Agreement (BTA) with the US,” he said.
Concerns Regarding US Recession and Chinese Slowdown
Experts are raising concerns more frequently about a possible US recession, while China seems to be the most negatively affected by the trade war. The looming threat of further tariffs by US President Donald Trump—of up to 50% on Chinese imports—has put heavy pressure on bilateral trade relations.
“Such a step could practically paralyse Chinese exports to the US,” Vijayakumar added. “As a counter-move, China could begin dumping its excess commodities, such as metals, into other markets, causing metal prices to remain weak for a longer period internationally.”
Cautious Optimism for Indian Investors
Though the global cues are strong against it, India’s macroeconomics are nonetheless quite solid, and a projected GDP growth of approximately 6% in FY26 is reason enough to keep long-term investors cautiously optimistic, according to experts.
“Valuations are reasonable for large-cap stocks, and sectors such as pharma, which will not be impacted by US tariffs in the near term, are good entry points,” added Vijayakumar.
Foreign Investor: Huge Capital Flows Out
Indian shares saw a severe setback on Monday, with foreign institutional investors withdrawing around $1.05 billion from equities — the largest one-day withdrawal since February 28. The total market capitalisation of NSE-listed companies fell by a whopping $280 billion over the last three sessions.
While that was happening, domestic institutional investors (DIIs) staged a rescue bid by buying equities worth ₹12,122 crore to help cushion the market from worse losses.
Investor Sentiment Still Shaky Amid Global Uncertainty
Despite the early Tuesday rally, market analysts feel that investor sentiment continues to be fragile. Shiv Chanani, a fund manager for equities at Baroda BNP Paribas Mutual Fund, said, “The atmosphere of fear and uncertainty will prevail until global trade stabilises. Indian equities can witness occasional recoveries, but volatility will remain for a while.”
Fuelling the worry further, FIIs have raised their net short positions from ₹86,592 crore on Friday to ₹1.07 lakh crore on Monday, reflecting bearish sentiments in the near future.
Global Markets Mired; Oil, Gold Prices Gain
Markets in the US closed mixed on Monday amid uncertainty and fears of a recession. President Trump renewed his tough stance on tariffs, hinting at new duties on imports from China. Meanwhile, Asian markets initially exhibited signs of revival on Tuesday, bolstered by a favourable beginning to US futures trading.
In contrast, gold prices recovered from a four-week low, supported by rising safe-haven demand as trade tensions picked up. Crude oil recovered, with prices rising more than 1%, although the underlying issues surrounding global demand amid a potential economic slowdown continue.
Conclusion
Though Indian markets made a strong comeback on Tuesday, the overall mood is still being driven by caution. The positive trend may hold in the short term, but the fate of US-China trade talks, US economic releases, and investor reaction to global uncertainty will determine the next market move. Investors should tread warily, remain steadfastly invested in good quality stocks, and maintain a long-term holding horizon in the current uncertain environment.
Excerpt:
Markets recover after large drops. Investors are interested in solid firms. Trade concerns linger, but mood improves slightly.
