Indian stock markets ended higher for the second straight session on Thursday, March 6, driven by improving global sentiment and fresh domestic buying. The recent market slump, which had made India the worst-performing major market since late September, has seemingly drawn in value investors as stock valuations turned more reasonable.
The Nifty 50 climbed 0.93% to settle at 22,544 points, while the Sensex gained 0.83% to close at 74,340. The broader market indices also stayed in the green—Nifty Midcap 100 rose 0.37% to 49,348, and Nifty Smallcap 100 surged 1.32% to 15,400.
Markets across the world found some relief after former U.S. President Donald Trump announced a one-month exemption for Canadian and Mexican automakers from his proposed 25% tariffs, provided they adhere to existing free trade agreements. This move spurred rallies in the U.S. and European stock markets, with Asian markets, including India, riding the momentum.
The ongoing decline in crude oil prices offered another boost, with Brent crude futures dipping below $70 per barrel for the first time in three years. This particularly benefited crude-sensitive stocks like paint manufacturers and oil marketing companies (OMCs). Shares of Bharat Petroleum Corporation Ltd. (BPCL), Hindustan Petroleum Corporation Ltd. (HPCL), and Indian Oil Corporation Ltd. (IOC) jumped 5%, pushing the Nifty Oil & Gas index up by 2.60%—making it the best-performing sector of the day.
Banking and non-banking financial companies (NBFCs) also gained traction after the Reserve Bank of India (RBI) announced measures to inject ₹1.9 trillion into the financial system. With liquidity concerns easing, investors showed renewed interest in banking stocks, helping the sector advance.
A weakening U.S. dollar added fuel to the rally in metal stocks. The Dollar Index slipped to around 104, its lowest level in four months, supporting demand for commodities. The Nifty Metal index extended its winning streak, climbing 2.34% to 8,888 points, following a 4% jump in the previous session. Additional support came from China’s recent stimulus measures, which kept global metal prices firm.
Other key sectors also ended in positive territory. Nifty Pharma, Nifty FMCG, Nifty Media, Nifty Auto, and Nifty PSU Bank posted gains ranging from 0.66% to 1.47%. The only exception was the Nifty Realty index, which slipped slightly by 0.17%.
Global brokerage firm Jefferies suggested in its latest report that historically, India tends to bounce back within 90-180 days after periods of underperformance. The report highlighted that India’s valuation premium is now closer to its historical average, down from its peak earlier in 2024. With the Dollar Index down 4% from its recent high, foreign portfolio investor (FPI) flows could potentially turn positive again. Liquidity measures from the RBI and a stable macroeconomic outlook might also contribute to short-term market strength.
(By arrangement with livemint.com)