War, Trade and Q4 Data: Markets at a Crossroads
Ratin BiswassCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Editorial, Market Moves, Market Watch
After a much awaited rebound that investors had been hoping for over the past six to seven months
Domestic markets displayed resilience despite power blackouts, blaring sirens, and heightened volatility during the India-Pakistan war
After a much-awaited rebound that investors had been hoping for over the past six to seven months, the benchmark indices entered a phase of cautious consolidation. Over the recent fortnight, markets remained largely flat, awaiting a decisive trigger to define the next directional move—either upward or, potentially, downward. The unfortunate terror attack in Pahalgam introduced a layer of geopolitical uncertainty, prompting questions around India’s possible response. The Nifty VIX, a key indicator of market volatility and investor fear—surged over 25 per cent during the fortnight, signalling heightened nervousness.
This sharp rise suggests a bearish undertone and points to potential selling pressure in the near term, as markets brace for uncertainty. However, contrary to expectations, domestic markets reacted with relative calm, even after India’s firm stance on not tolerating cross-border terrorism. Encouragingly, both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) maintained their confidence in India’s long-term growth story. FIIs recorded net inflows of over ₹12,750 crore, while DIIs extended further support with net purchases worth ₹19,700 crore.
The BSE Sensex posted a modest 0.31 per cent gain, while the Nifty 50 saw a marginal decline of 0.13 per cent over the fortnight. Broader indices also held steady, falling only 1-2 per cent despite the heightened geopolitical tensions between two nuclear-armed nations. Sectoral performance remained subdued, with only a few segments showing any meaningful movement. Sectors such as power, real estate, and banking, which saw strong buying in the previous fortnight, faced profit booking amid rising uncertainties. In contrast, auto and information technology stocks continued their upward momentum, supported by sustained investor interest and sector-specific tailwinds.
Auto sector stocks rallied following news of a Free Trade Agreement (FTA) between India and the United Kingdom, under which India is expected to significantly reduce automotive tariffs. With Jaguar Land Rover (JLR) likely to emerge as a key beneficiary, shares of Tata Motors Ltd surged over 8 per cent on heightened investor optimism.
Information technology sector stocks remained stable over the past fortnight, as Q4FY25 results were largely in line with market expectations. Overall, the sector recorded modest single-digit growth in both revenue and net profit.
While leading players such as TCS and Infosys delivered subdued performances, companies like Wipro, Tech Mahindra, and Persistent Systems stood out with robust double-digit growth in net profit. Overall market sentiment remained positive, driven by the potential IndiaU.S. trade deal, which boosted investor confidence. The optimism extended across multiple sectors, including electronics, pharmaceuticals, metals, textiles, and others. The conclusion of the India-Pakistan war, coupled with renewed optimism from the U.S.-China trade deal, has uplifted sentiment across global markets. These developments are expected to significantly influence the market’s trajectory in the coming weeks. Stay tuned for further updates.
