Market Wrap: D-Street ends higher as banks offset auto slump; Sensex gains 318 pts, Nifty above 23,550

Indian benchmark indices closed in the green on Thursday, bouncing back from a negative start as advances in heavyweight financial stocks provided support, though further upside was capped by a decline in auto stocks, led by Tata Motors, following the announcement of U.S. tariffs on auto imports.

The benchmark BSE Sensex added 317.93 points or 0.41% to close at 77,606.43, while the broader Nifty 50 index closed at 23,591.95, higher by 105.10 points or 0.45%.

The market capitalization of all listed companies on the BSE increased by Rs 2.20 lakh crore to Rs 414.68 lakh crore.

Sector Watch

The auto index declined 1%, with most constituents ending in the red. Tata Motors, which exports a significant share of its profit-driving Jaguar Land Rover vehicles to the U.S., slumped 5.4% after President Donald Trump announced a 25% tariff on auto imports, set to take effect on April 2.

Samvardhana Motherson International, which has key operations in Europe, also closed 1.8% lower.

Meanwhile, financial stocks provided support, with the Nifty Financial Services index gaining 0.7%, Nifty Bank rising 0.7%, and Nifty PSU Bank surging 2.5%. Heavyweight HDFC Bank added 0.8%.

The broader market also advanced, as the Nifty Midcap 100 and Nifty Smallcap 100 climbed 0.4% and 1.2%, respectively.

IT stocks, which derive a substantial portion of their revenue from the U.S., rebounded from early losses, with the Nifty IT index gaining 0.6%. Wipro led the sector, jumping 1.7% after securing a £500 million strategic deal with Phoenix Group, the UK’s largest long-term savings and retirement business.

Adding to market volatility was the expiry of the Nifty 50’s March derivatives contracts, prompting investors to adjust positions through closures or rollovers.

The Nifty 50 has gained over 6% in March so far and remains on track to break its longest monthly losing streak in nearly three decades.

Expert View

Domestic indices maintained optimism throughout the day, driven by sustained foreign fund inflows and the purchase of blue-chip stocks, said Vinod Nair, Head of Research at Geojit Investments, adding that "the 25% tariff on auto imports imposed by Trump has affected auto stocks and raised concerns within the pharma sector."

"Despite these challenges, the broader market demonstrated resilience, supported by expectations of double-digit earnings growth in FY26, driven by easing inflation and a downward trend in interest rates, which are anticipated to improve domestic fundamentals. Attention is now focused on the US-India trade meeting, which commenced on Wednesday, aiming to provide greater clarity on the bilateral trade agreement between the two nations," said Nair.

Global Markets

Global automaker stocks plunged on Thursday after President Donald Trump imposed steep tariffs on imported vehicles, intensifying concerns over global trade disruptions and potential profit hits for the industry. On Wednesday, Trump followed through on weeks of threats, announcing a 25% tariff on non-U.S.-built cars, set to take effect on April 3.

Despite being widely anticipated, the move triggered a broad selloff. In premarket trading, General Motors dropped 7%, while Ford shed about 4%, as the tariffs threaten U.S. automakers' reliance on cross-border supply chains and assembly operations in Mexico and Canada.

European auto stocks also took a hit, with Volkswagen slipping 2%, while BMW and Mercedes-Benz each fell around 3%.

In Japan, transport stocks lost $16.5 billion in market value overnight, according to LSEG data, as Toyota declined 2.7%, Honda 3%, and Nissan 2.2%. In South Korea, Hyundai and Kia each fell around 4%.

Tesla saw only marginal losses in premarket trading, as existing trade barriers already limit competition from Chinese EV makers like BYD and Nio in the U.S. market.

Investors now await further details on the broader set of tariffs Trump is expected to announce next week.

Currency Watch

The Indian rupee edged lower on Thursday, closing at 85.78 against the U.S. dollar, down 0.1% on the day, as routine dollar demand from importers weighed on the currency, even as its Asian counterparts gained amid a broadly weaker dollar.

Meanwhile, the dollar index, which measures the greenback's strength against six major currencies, dipped 0.11% to 104.43.

Crude Impact

Oil prices held steady on Thursday as markets weighed the impact of new U.S. tariffs, while concerns over global supply kept prices near one-month highs. By 0912 GMT, Brent crude futures dipped 23 cents, or 0.3%, to $73.56 a barrel.

FII/DII Tracker

Foreign portfolio investors (FPIs) remained net buyers in Indian equities for the fifth straight session on Wednesday, marking their longest daily inflow streak in six months. FPIs injected Rs 2,240.55 crore into domestic stocks, reflecting renewed investor confidence.

Meanwhile, outflows from Indian equities in March are set to drop to a three-month low, alleviating concerns over prolonged foreign selling.