Stock Markets Rebound Despite Trade Shock, Sensex and Nifty Close Higher

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Indian stock markets overcame early jitters triggered by heightened U.S. trade tensions and closed in the green on Wednesday, as strong buying in key sectors helped both the Sensex and Nifty reverse losses.

The trading day began on a weak note following the announcement that the United States would double tariffs on Indian exports, raising duties from 25 percent to 50 percent. The initial market reaction was sharp, with the Sensex dropping to 80,236.69 and the Nifty slipping to 24,475.55, both touching three-month lows.

However, sentiment improved toward the end of the session, driven by last-hour buying on account of the weekly expiry of Nifty derivatives. The Sensex ultimately closed 79.27 points higher at 80,623.26, while the Nifty ended up 21.95 points at 24,596.15.

Market analysts pointed out that expiry-related trading activity and continued investor confidence in domestic fundamentals contributed to the recovery. There were also expectations that the government would engage in diplomatic discussions before the tariffs came into effect on August 27, helping to contain investor concerns.

Sector-wise, gains were led by banking, IT, auto, and FMCG stocks. Top gainers on the Sensex included Tech Mahindra, HCL Technologies, Axis Bank, Maruti Suzuki, Tata Steel, HDFC Bank, and Asian Paints. On the other hand, Trent, Hindustan Unilever, Mahindra & Mahindra, Kotak Mahindra Bank, NTPC, and Tata Motors ended in the red.

Broader indices also saw positive movement, with the Nifty Financial Services, Bank Nifty, Nifty Auto, Nifty IT, and Nifty FMCG all closing in positive territory.

In the currency market, the Indian rupee held relatively firm and closed at 87.7025 against the U.S. dollar. Traders attributed the rupee’s stability to anticipated intervention from the Reserve Bank of India, aimed at managing volatility amid rising global uncertainty.

Despite the geopolitical noise, domestic equity markets managed to show resilience, aided by strong institutional flows and favorable derivative trends. Investors appeared to take a long-term view, shrugging off the immediate impact of tariff escalation.