In a surprising market rebound on Tuesday, March 18, India’s stock market indices—the Sensex and Nifty 50—experienced notable gains, defying global economic challenges. The Sensex surged over 800 points, while the Nifty 50 reclaimed the 22,700 marks, buoyed by widespread buying activity. Notably, the BSE Midcap and Small cap indices also rose by up to 2%.
IT Sector Leads the Charge
The rally was largely driven by the IT sector, with Coforge seeing a nearly 10% jump after securing a major 13-year deal worth $1.56 billion with Sabre Corp. The IT index rose by 2%, recovering some of the losses it had sustained over the past 10 sessions. Infosys and Persistent Systems also saw gains after JPMorgan added them to its high-conviction list, praising their growth potential.
Positive Global Sentiment
Asian markets followed suit, with the MSCI Asia ex-Japan index climbing 1% following comments from U.S. Commerce Secretary Gina Raimondo, who suggested the possibility of rolling back tariffs on Canada and Mexico. This eased global market sentiment, with Indonesian stocks rising 3% after a prior dip, and the Malaysian ringgit, Philippine peso, and South Korean won all strengthening slightly due to a drop in U.S. Treasury yields.
India’s Services Sector Gains Momentum
On the domestic front, India’s services sector showed strong growth in February, supported by rising demand and increased hiring. HSBC’s services PMI climbed to 59.0 from 56.5 in January, with rising export orders contributing significantly to this positive trend.
Ongoing Concerns Over Tariff Uncertainty
Despite the positive developments, the global economic outlook remains uncertain, particularly due to U.S. President Donald Trump’s ongoing tariff policies. Countries like Canada, China, and Mexico have already implemented countermeasures, with more expected in the coming weeks. Trump’s confirmation that new reciprocal tariffs will take effect from April 2 has led to concerns about potential volatility across global markets, including India.
Market analyst VK Vijayakumar from Geojit Financial Services noted that while the current rally offers some respite, the ongoing tariff uncertainty continues to weigh on investor sentiment, keeping trading volumes low. He added that while the markets are experiencing some weakness, a shift in global developments could quickly change the market’s direction.
