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Key gauges end flat on trade war worries
Mar-07-2025

Snapping two-day winning streak, Indian equity benchmarks surrendered early gains to close flat in a highly volatile trade on Friday as uncertainties over the global trade war sapped investor's risk appetite. Traders also remained cautious ahead of key macroeconomic data, i.e., inflation data and industrial production data, which are due on March 12.

Some of the important factors in today’s trade:

Uninterrupted foreign fund outflows: Foreign institutional investors (FIIs) offloaded equities worth Rs 2,377.32 crore on a net basis on Thursday, according to exchange data. 

Crude oil prices rose: Crude oil prices settled higher, supported by easing U.S. tariff concerns and expectations of further economic stimulus from China. The Trump administration’s temporary exemption for automakers in Mexico and Canada from the newly imposed 25% tariffs helped lift sentiment. 

India’s real GDP growth to be steady at 6.5% in fiscal 2026: Crisil Intelligence in a report stated that India’s real GDP growth would be steady at 6.5 per cent in fiscal 2026 despite uncertainties stemming from geopolitical turns and trade-related issues led by US tariff actions.  

Rupee rebounded sharply: Indian rupee rebounded sharply and settled with a gain of 17 paise at 86.94 (provisional) against the US dollar, as the American currency index declined to its five-month-low level. 

Weak global cues: European markets were trading lower due to uncertainty around U.S. tariff policy and China's growth outlook. Asian markets settled mostly down on Friday as traders looked ahead to the release of the U.S. nonfarm payrolls report, followed by a speech from Federal Reserve Chair Jerome Powell later in the day for additional clues about monetary policy outlook for the world's biggest economy. 

Finally, the BSE Sensex fell 7.51 points or 0.01% to 74,332.58, and the CNX Nifty was up by 7.80 points or 0.03% to 22,552.50. 

The BSE Sensex touched high and low of 74,586.43 and 74,038.03 respectively. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.30%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Industrials up by 0.86%, Basic Materials up by 0.62%, Energy up by 0.59%, Capital Goods up by 0.47% and Metal up by 0.40%, while Consumer Durables down by 1.11%, Utilities down by 0.91%, IT down by 0.83%, Realty down by 0.75% and TECK down by 0.59% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.18%, Nestle up by 1.62%, Tata Motors up by 1.36%, Adani Ports &SEZ up by 0.81% and Tata Steel up by 0.80%. On the flip side, Zomato down by 3.82%, Indusind Bank down by 3.53%, NTPC down by 2.49%, Infosys down by 1.60% and HCL Technologies down by 1.55% were the top losers.

Meanwhile, Crisil Intelligence in a report has said that India’s real gross domestic product (GDP) growth would be steady at 6.5 per cent in fiscal 2026 despite uncertainties stemming from geopolitical turns and trade-related issues led by US tariff actions. CRISIL’s forecast for India’s economy depends on two key factors. The rating agency anticipates that normal monsoon and commodity prices will continue to remain soft, which will keep the food prices stable. Cooling food inflation, the tax benefits announced in the Union Budget 2025-2026, and lower borrowing costs are expected to drive discretionary consumption.

As per the Crisil Intelligence, the growth is now returning to pre-pandemic rates as fiscal impulse normalizes and the high-base effect wears off. Even with that, the high-frequency Purchasing Managers Index (PMI) data reveals that India maintains its pole position among major economies. It said ‘India’s resilience is being tested again. Over the past few years, we have built a few safe harbors against exogenous shocks–healthy economic growth, low current account deficit and external public debt, and adequate forex reserves–which provide ample policy latitude. So, while the waters can turn choppy, consumption-led rural and urban demand will be crucial to short-term growth’.

It further said that, on the other hand, continuing investments and efficiency gains will aid in the medium term. It added ‘We foresee both manufacturing and services supporting growth through fiscal 2031’. As per the agency, the manufacturing growth is expected to average 9.0 per cent per year over fiscals 2025-2031, up from 6 per cent on average in the prepandemic decade. The services sector is expected to grow slower, though it will remain the primary growth driver. As a result, the share of manufacturing in GDP will increase to 20 per cent from 17 per cent in fiscal 2025.

In fiscal 2026, the credit rating agency expects the recent softening in food inflation will continue and pull down the headline further. Inflation softened in fiscal 2025, led by lower non-food inflation, while food inflation has risen. The credit rating company further anticipated another 50-75 basis point rate reduction over the next fiscal. As per the report, sharp government focus on expanding capabilities in new-age sectors, achieving higher localisation and driving backward integration in key value chains and reforms such as the Make in India initiative, the phased manufacturing programme and PLI are showing green shoots across sectors. However, the report added that the global environment presents many headwinds. It also said the uncertainty about trade and tariffs will make it relatively more difficult to acquire technology, scale up and drive exports.

The CNX Nifty traded in a range of 22,633.80 and 22,464.75. There were 20 stocks advancing against 30 stocks declining on the index.  

The top gainers on Nifty were Reliance Industries up by 3.04%, Tata Motors up by 1.23%, Bharat Electronics up by 1.19%, Bajaj Auto up by 1.19% and Hindalco up by 1.17%. On the flip side, Indusind Bank down by 3.78%, NTPC down by 2.22%, Shriram Finance down by 2.07%, Infosys down by 1.80% and BPCL down by 1.72% were the top losers. 

European markets were trading lower; UK’s FTSE 100 decreased 45.44 points or 0.52% to 8,637.40, France’s CAC fell 84.48 points or 1.03% to 8,113.19 and Germany’s DAX lost 376.13 points or 1.61% to 23,043.35.

Asian markets settled mostly down on Friday ahead of key US employment data due later in the day. Market sentiments weakened further by tracking Wall Street’s fall overnight and with worries that US President Donald Trump's trade tariffs will hurt domestic as well as global growth. Japan's Nikkei share average fell as technology shares tracked Wall Street declines, while Japanese currency yen extended gains for a third day against the dollar amid heightened uncertainty over US trade policies and hawkish signals from the BoJ. Chinese shares declined after data showed China's exports growth eased more than expected at the start of the year and imports logged an unexpected sharp decline amid mounting trade tensions. 

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,372.55

-8.55

-0.25

Hang Seng

24,231.30

-138.41

-0.57

Jakarta Composite

6,636.00

18.15

0.27

KLSE Composite

1,547.27

-11.64

-0.75

Nikkei 225

36,887.17

-817.76

-2.22

Straits Times

3,914.48

-2.58

-0.07

KOSPI Composite

2,563.48

-12.68

-0.49

Taiwan Weighted

22,576.07

-139.36

-0.62
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