Indian Shares Rally Amid Trade Strategy Reassessment

Indian shares experienced a notable recovery, with the Sensex rising 320 points. The market's positive shift is attributed to legal developments regarding U.S. tariffs, suggesting a potential shift in trade strategy for India. Investors should watch this dynamic closely.

Date: 29-05-2025

AI Rating: 7

Market Recovery & Trade Dynamics
Indian shares showed resilience as the benchmark S&P/BSE Sensex closed up 320.70 points (0.39%), signaling a recovery from earlier declines attributed to liquidity concerns and promotional block deals. The afternoon rally was fueled by a U.S. federal court ruling that questioned the legality of former President Trump's 'Liberation Day' tariffs, prompting experts to advise the Indian government to reevaluate its trade stance with the U.S.

This development may influence investor sentiment favorably, as a clearer and more stable trade relationship between India and the U.S. could contribute to a healthier market environment and potentially enhance foreign investments. The market breadth on the BSE revealed a strong preference for buyers, which is typically a positive indicator for future price movements.

Company Performance
Key stocks like Infosys, Kotak Mahindra Bank, Tata Motors, and others gained between 1-2%. This upward movement indicates robust buying interest and could point to positive earnings momentum going forward. Stable or increasing earnings per share (EPS) in these firms, particularly post-trade reassessment, may support stock price growth.

Potential Risks
However, investors should remain cautious as the discussions surrounding tariffs and new trade agreements could create volatility, especially if the legal clarity does not result in favorable outcomes for trade negotiations. Furthermore, continuous block deals by promoters signals a potential liquidity risk that could impact overall sentiment in the coming months.

Stocks: INFY KMB TTM AXB TECHM TATASTEEL ADANIPORTS ETERNAL SUNPHARMA INDUSINDBK