Indian stock markets opened positively on Wednesday, with the Nifty 50 rising 0.17% to 22,536.35 and the BSE Sensex increasing 0.23% to 74,270.81. This optimism followed U.S. President Donald Trump’s reassurance about the economy, which helped U.S. markets recover losses. Despite this, investors remain cautious, with portfolio managers opting for safer investments, increasing cash reserves, and diversifying to mitigate risks from Trump’s trade policies. While most Indian sectors saw gains, the Nifty IT sector dropped by 1.14%. Asian markets also performed well, reflecting overall investor confidence amid persistent global uncertainties.
Mumbai:
The Indian stock markets began positively on Wednesday, despite facing pressure globally from markets in the US and Europe.
The Nifty 50 index commenced trading at 22,536.35, reflecting an increase of 38.45 points or 0.17 percent, whereas the BSE Sensex started at 74,270.81, up by 168.49 points or 0.23 percent.
On Tuesday, U.S. President Donald Trump provided reassurance to investors by stating he does not foresee a risk of a U.S. recession. This statement aided U.S. markets in recovering some prior losses, alleviating investor concerns. However, many continue to be cautious regarding the overall market trajectory.
Experts noted that portfolio managers are adopting a cautious strategy amidst the uncertainty. They are maintaining additional cash reserves, reducing holdings in overvalued stocks, and diversifying their portfolios to mitigate risks associated with Trump’s trade policies.
Unlike his first term, Trump appears more at ease with market fluctuations, fostering the belief that his administration is less inclined to intervene in order to assist stock markets.
Ajay Bagga, a Banking and Market Expert, told ANI, “Yesterday, Trump acknowledged to the media that he does not perceive a threat of a U.S. recession. Markets found some reassurance and rallied toward the close, reversing some of Tuesday’s declines. How are portfolio managers navigating these uncertain times? By retaining some liquidity, exiting high-valuation stocks, and diversifying away from the risks posed by Trump’s tariffs. Expectations of a ‘Trump Put’ have been dashed as the pain threshold of Trump 2.0 is significantly higher than that of Trump 1.0. President Trump is more tolerant of market declines this time around.”
Another indication of investor caution is the increase in U.S. money market funds, which have now exceeded USD 7 trillion in assets under management.
This trend is indicative of many investors steering clear of riskier assets, opting instead for safer investments such as gold, silver, and short-term U.S. Treasuries. With frequent shifts in economic policies and global trade uncertainties, many experts concur that patience is the optimal strategy for investors.
Most sectors in Indian stocks experienced gains, with the exception of Nifty IT, which fell by 1.14 percent due to lackluster sentiment stemming from U.S. markets. In the Nifty 50 index, 32 stocks opened in positive territory while 16 faced declines, reflecting the overall strength in Indian markets.
Akshay Chinchalkar, Head of Research at Axis Securities, stated, “The Nifty’s rebound yesterday from the initial drop clearly indicates that bulls are active. Though the recovery formed a bullish ‘piercing line’ pattern, bullish sentiment will strengthen further only if Monday’s high of 22677 is surpassed, with a preliminary target in the 22720 – 22798 range. For this to materialize, we must sustain above the support level at 22245. A fall below this threshold will likely lead to testing critical support at 22117. For the moment, bulls hold a slight advantage.”
Meanwhile, Asian markets displayed strong performance on Wednesday. Taiwan’s Weighted Index surged by 1.43 percent, South Korea’s KOSPI rose by 1.47 percent, and Indonesia’s Jakarta Composite increased by 1.24 percent. However, Hong Kong’s Hang Seng Index saw a slight decline of 0.13 percent.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)