Stock market today: Sensex, Nifty may rise further; here's why

Thanks to an overnight rally on Wall Street, domestic benchmark indices Sensex and Nifty look all set to open with a gap up opening today, taking their winning runs to the seventh straight session. US stocks jumped overnight, as the planned reciprocal tariffs from April 2 are expected to be more targeted one than originally thought. Besides, there were reports that sector-specific tariffs could to be delayed. 

Add to that, the trend of FPI outflows has reversed recently with provisional data showing FPIs were net buyers of Rs 3,055.76 crore worth Indian equities on Monday. Appreciating rupee is another positive. At last count, Gift Nifty was trading 62 points higher at 23,757. 

Nomura in its latest report said India has adopted a more conciliatory approach to the Trump presidency, unlike other key trading partners of the US. 

"It has proactively taken steps to reduce its trade barriers and, by the time of the Modi-Trump meeting in February, which set the stage for India and US to start negotiations on a bilateral trade agreement (BTA), India had already cut duties in sectors like textiles, motorcycles and bourbon," Nomura said. 

It noted that India has also avoided any tit-for-tat response to provocations from Trump, be it in rhetoric or in terms of actual tariff increases, despite being hit by the US’s global tariff hikes on steel and aluminum imports.

On Monday, Dow Jones climbed 597.97 points, or 1.42 per cent, to close at 42,583.32. S&P500 index advanced 100.01 points or 1.76 per cent at 5,767.57. Global markets across mainland China, Japan and Korea gained up to 0.8 per cent earlier today. Hong Kong's Hang Seng was down 1 per cent, though. 

"Despite short-term uncertainties clouding investor sentiment, strong macro fundamentals, earnings growth and valuations support the positive medium-to-long-term outlook. With Nifty50 at 17.8 times one-year forward earnings, trading at a 5.4 per cent discount to its 5-year median and 12.9 per cent to its 10-year median, we see opportunities for selective stock picking, favouring largecaps and midcaps over smallcaps," said Anand Rathi.

This brokerage noted that  historically Nifty corrected yearly, with 63 per cent of declines up to 15 per cent and 26 per cent declines between 15 per cent and 30 per cent. At present, the 50-pack index is down 10.9 per cent since September 2024 due to geopolitical risks, GDP slowdown and foreign liquidity reversal. 

"Nifty50 typically rebounds within three months after such corrections. FY26 earnings downgrades remain mild, thereby highlighting that Nifty50’s valuation de-rating has been the most significant," it said.