GIFT Nifty:
The Nifty 50 is projected to open higher, following a 22.50-point rise in the GIFT Nifty February 2025 futures contract.
Institutional Flows:
Foreign portfolio investors (FPIs) sold shares worth Rs 3,958.37 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 2,708.23 crore in the Indian equity market on 3 February 2025, provisional data showed.
According to NSDL data, FPIs have sold shares worth Rs 514.93 crore (so far) in the secondary market during February 2025. This follows their sale of shares worth Rs 81903.72 crore in January 2024.
Global Markets:
Asian stocks rebounded on Tuesday following news that the U.S. will postpone tariffs on Mexico and Canada for a month to allow for negotiations on border security. However, investor concerns persist due to the U.S. administration's warning that tariffs on China could increase if a trade deal addressing trade imbalances and fentanyl trafficking is not reached.
Uncertainty surrounding trade policies remains a key concern for investors, particularly given the expressed intent to impose additional tariffs, including a proposed 10% universal tariff.
The Canadian Prime Minister stated on Monday that the U.S. had agreed to a 30-day delay on planned tariffs following a meeting between the two leaders. This announcement came shortly after a similar 30-day delay on tariffs against Mexico was announced after a call between U.S. and Mexican leaders. However, tariffs on China are still scheduled to take effect on Tuesday. China has expressed strong opposition to these tariffs and vowed to retaliate.
Over the weekend, tariffs were announced: 25% on Canada and Mexico, and 10% on China (with a reduced 10% tariff on Canadian oil).
U.S. stock indices experienced sharp declines on Monday following the tariff announcements but recovered from their session lows after the tariff delays were announced. The S&P 500 closed down 0.8%, the NASDAQ Composite fell 1.2%, and the Dow Jones Industrial Average decreased by 0.3%.
In addition to earnings reports, this week's focus is on the January nonfarm payrolls data, which is due on Friday and is expected to influence interest rate expectations.
Domestic Market:
The domestic equity benchmarks closed modestly lower on Monday, mirroring weak global sentiment driven by escalating trade war concerns. The downturn was largely attributed to recent tariff impositions by the United States on Canada, Mexico, and China, raising anxieties about a wider trade conflict. The long-term consequences of these tariffs remain uncertain, with the existing trade imbalances and tariff-driven dynamics creating market instability. The Nifty index closed below the 23,400 mark. Energy, metals, and FMCG shares were the primary decliners, while IT, consumer durables, and healthcare stocks managed to resist the downward trend. With the 2025 budget now concluded, market attention shifts to the Reserve Bank of India's monetary policy announcement scheduled for February 7.
The S&P BSE Sensex, declined 319.22 points or 0.41% to 77,186.74. The Nifty 50 index lost 121.10 points or 0.52% to 23,361.05.
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