Markets Rally Ahead of Expiry; Auto Stocks Slide on Trump’s Tariff Shock

Indian stock markets rebounded on Thursday, with Sensex climbing over 300 points and Nifty surpassing 23,550, despite initial concerns over U.S. President Donald Trump’s 25% auto import tariff. While most sectoral indices traded in the green, the auto sector plunged, weighed down by Tata Motors and other ancillary companies exposed to the U.S. market.

Benchmark Indices Recover After Weak Opening

After a sluggish start, Indian benchmark indices bounced back, driven by renewed investor confidence and selective buying in heavyweight stocks.

Index Movements:

• Sensex: Up 300 points, extending gains after a choppy morning session.

• Nifty 50: Above 23,550, rising 0.28%.

• BSE Midcap Index: Up 0.5%, signaling midcap resilience.

• BSE Smallcap Index: Up 1%, outperforming broader markets.

While most sectors showed strength, the auto sector remained under pressure due to Trump’s tariff policy, which could significantly impact exports.

Autos Sink as Trump Tariff Fears Hit Sentiment

The biggest drag on the market was the Nifty Auto index, which fell 1.4%, led by steep declines in Tata Motors, Samvardhana Motherson International, and Bharat Forge.

Major Auto Stock Declines:

• Tata Motors: Down 6.5%, as Trump’s tariff directly impacts Jaguar Land Rover (JLR).

• Samvardhana Motherson International (SAMIL): Fell 5.8%, given its U.S. exposure.

• Bharat Forge: Dropped 3%, affected by potential disruption in global supply chains.

• Eicher Motors: Declined 2%, extending its losing streak.

The auto sector remains the weakest link in the market, as higher import duties in the U.S. threaten margins and demand for Indian automobile exports.

IT Stocks Trim Losses, Wipro Gains on UK Deal

While the tech sector faced global headwinds, selective buying helped offset early losses. Wipro stood out, surging 2% after announcing a £500 million (approx. $650 million) strategic deal with Phoenix Group in the UK.

IT Sector Highlights:

• Wipro: Jumped 2%, driven by a multi-year outsourcing contract.

• Infosys & HCL Tech: Recovered from early losses, amid improving investor sentiment.

• TCS: Flat, as global uncertainty kept gains in check.

Despite a historical trend of IT stocks underperforming in April, Wipro’s strong contract win fueled buying in the sector.

Broader Market Trends: Financials, Infra, and Energy Sectors Gain

Most sectoral indices showed strength, with financials, infrastructure, and energy stocks leading the rally.

Key Sector Performances:

• Financials: Banks and NBFCs traded in the green, led by IndusInd Bank and HDFC Life.

• Infrastructure & Industrials: Benefited from government spending and rising capex investments.

• Energy: Adani Group stocks surged, adding Rs 40,000 crore in market cap over the last 15 days.

Investment Expert Ajay Bagga remains bullish on financials, infrastructure, and IT, citing capex-driven growth and stable NPAs as key positives.

Global Markets React to Trump’s Trade Moves

Asian and European stock markets struggled after President Trump’s new auto tariffs, triggering a risk-off sentiment.

Global Market Reactions:

• S&P 500 futures: Down 0.2%, reflecting nervousness.

• Hang Seng Index: Fell 0.1%, tracking weak global cues.

• Japan’s Topix: Dropped 0.7%, weighed down by auto stocks.

• Australia’s ASX 200: Declined 0.6%, reflecting weaker risk appetite.

• Euro Stoxx 50 futures: Down 1.2%, as European auto majors brace for tariff impact.

Global investors remain cautious, as higher tariffs could disrupt global supply chains and impact profitability for automakers with significant U.S. exposure.

SEBI Plans New Penalty Framework to Ease Broker Compliance Burden

The Securities and Exchange Board of India (SEBI) is considering a new penalty system to reduce multiple fines on brokerage firms for the same violations.

SEBI Policy Changes:

• Consolidated penalty structure to prevent multiple fines.

• Increased disclosure threshold for Foreign Portfolio Investors (FPIs) from Rs 25,000 crore to Rs 50,000 crore.

• Stronger compliance with anti-money laundering regulations, ensuring better transparency.

This move aims to streamline regulations, making it easier for brokerage firms to operate while maintaining investor confidence.

Adani Stocks Surge as Gautam Adani Becomes India’s Top Wealth Gainer

The Adani Group continues its recovery, with its stocks adding Rs 40,000 crore in market capitalization over the past 15 days.

Adani Group Highlights:

• Adani Enterprises: One of the few Adani stocks to lag behind.

• Gautam Adani: India’s top wealth gainer, but still trails Mukesh Ambani.

• Potential Acquisition: Adani Group shows interest in acquiring Jaiprakash Associates Ltd., a bankrupt firm.

• Regulatory Concerns: Ongoing U.S. investigations continue to weigh on investor sentiment.

Despite past controversies, Adani stocks remain volatile but have shown a strong rebound in recent weeks.

What to Watch in the Coming Days

As markets approach monthly expiry, investors should keep an eye on the following:

1. Auto Stocks: Further weakness expected as Trump’s tariffs take effect.

2. Midcap & Smallcap Strength: Indices continue to outperform large caps.

3. IT Sector Resilience: Selective buying, but global uncertainty remains a headwind.

4. Adani Group Volatility: Potential acquisition moves could drive stock action.

5. SEBI Reforms: Brokerage firms may benefit from relaxed penalty rules.

With April seasonality historically favoring market gains, investors may find selective opportunities in midcaps, financials, and infrastructure stocks, while remaining cautious on auto and IT stocks with U.S. exposure.