August 4,2025:
Indian equity benchmarks recovered modestly on Monday, with both the Nifty 50 and Sensex registering gains after a string of weak sessions. The uptick was largely viewed as a technical rebound, as broader concerns over possible US reciprocal tariffs continued to weigh on investor sentiment.
The Nifty 50 index advanced 0.64%, closing at 24,722.25, while the BSE Sensex climbed 0.54% to settle at 81,044.98. Analysts attributed the move to a short-term correction after the recent slide, rather than a shift in market fundamentals.
“Markets were in an oversold zone, and today’s recovery appears technical in nature,” said a senior market strategist. “The broader outlook remains uncertain amid global trade developments.”
In recent days, investor confidence has been shaken by reports suggesting the United States may impose reciprocal tariffs on several countries, including India. These measures, if implemented, could disrupt global trade flows and impact key export-oriented sectors.
Foreign institutional investors (FIIs) remained net sellers, continuing a trend seen over the past week. According to provisional exchange data, FIIs offloaded shares worth over ₹1,200 crore on Friday. In contrast, domestic institutional investors (DIIs) provided some support, helping stabilize the indices.
Sectorally, auto, FMCG, and banking stocks led the rally. Notable gainers included HDFC Bank, Maruti Suzuki, and Hindustan Unilever, which contributed significantly to the day’s rise. However, sectors with greater exposure to overseas markets—particularly IT and pharmaceuticals—underperformed due to their sensitivity to foreign trade dynamics.
Broader markets also posted gains, with mid-cap and small-cap indices ending higher. However, lower-than-average trading volumes suggested that participation remained cautious, reflecting underlying investor unease.
Globally, market sentiment was mixed as traders monitored potential developments in US trade policy. The possibility of increased tariffs has raised concerns of retaliatory measures and further economic disruption in emerging markets.
Despite today’s recovery, experts remain cautious about the near-term outlook. Factors such as global trade tensions, currency fluctuations, foreign capital flows, and central bank policy signals are likely to influence market direction in the coming days.
Investors are expected to keep a close watch on upcoming macroeconomic data, corporate earnings, and any updates related to US-India trade relations. Until greater clarity emerges on the global policy front, analysts expect markets to remain volatile and range-bound.
