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• Equity benchmarks Sensex and Nifty closed flat, with buying activity shifting towards mid-cap and small-cap stocks. The Nifty Small-Cap and Mid-Cap indices rose by 2% each, driven by bargain hunting after falling 25-35% from recent highs. The advance-decline ratio for Nifty 500 stocks stood at 3.5:1.5 indicating strong momentum in the mid and small-cap sectors.

• Beaten-down sectors like the Nifty Defense Index gained 4%, while rail, exchange-related, metal, PSU banks, and real estate sectors also saw strong rallies. However, pharmaceutical stocks took a hit, with the Nifty Pharma Index falling by over half a percent after U.S.

• President Donald Trump signaled plans to impose a 25% tariff on imported drugs. This raised concerns about higher costs and potential disruptions for Indian drug makers, who are major suppliers to the U.S. market. Stocks like Aurobindo Pharma, Dr. Reddy’s Lab, Lupin, Zydus Lifesciences, Sun Pharma, Cipla, and Natco Pharma dropped between 1-3%.

• Nifty recovered 118 points during the day, closing at 22,932 points, marking a slight decline of 0.05% from the previous close. Meanwhile, Sensex gained 374 points from its low, ending the session with a marginal gain of 0.02%, closing at 75,955 points.

• The market expects the U.S. tariff to have a limited impact on the domestic economy, and traders are looking at mid-cap and small-cap stocks as attractive investments due to favorable risk-reward conditions.

Technical Outlook:

• Nifty index opened negative but witnessed a sharp uptick in the first hour itself and went on to 23050 zones. It was followed by a gradual dip later for most part of the session and closed below 23k marks.

• It formed a bullish candle on daily frame with longer upper shadow indicating that even though buying is intact at support levels but follow up is missing at higher zones. Now if it manages to cross and hold above 23000 zones then bounce could be seen towards 23150 then 23250 zones while supports are intact at 22800 then 22725 zones

Derivative Outlook:

• Nifty future closed negative with losses of 0.10% at 22950 levels. Positive setup seen in Zomato, Manappuram, Indian Hotels, UPL, CholaFin, Divis Labs, Persistent, Bajaj Finance, MGL, Bajaj FinServ, HDFC Bank, Hindalco, Jubilant Food, and Ashok Layland while weakness in LTIM, Zyduslife, Bata India, TCS, Dabur, Infy, Hindustan Unilever, ICICIGI, IRB, IDFC First Bank, SRF, Biocon, Trent, Astral, ABB and ABFRL.

• On option front, Maximum Call OI is at 23500 then 23000 strike while Maximum Put OI is at 22800 then 22500 strike. Call writing is seen at 23100 then 23000 strike while Put writing is seen at 22800 then 22900 strike. Option data suggests a broader trading range in between 22500 to 23500 zones while an immediate range between 22800 to 23300 levels.

• US reciprocal tariffs to have limited impact on India: S&P - S&P Global Ratings on Wednesday said the impact of the US reciprocal tariff will be limited on India as the economy is domestically oriented with less reliance on exports. YeeFarn Phua, Director, Sovereigns and International Public Finance Ratings, Asia-Pacific S&P Global also said India will clock a 6.7-6.8 per cent GDP growth over the next two years. He said the fiscal 2025-26 budget will boost growth for the next few years, largely by domestic demand through tax cuts for households and GDP growth is now normalising to a more "sustainable level".

• Infosys, Lufthansa partner to set up global viation center in Bengaluru – Company has entered into a strategic deal with Lufthansa Group and its IT subsidiary, Lufthansa Systems GmbH, to accelerate digital transformation in the aviation industry.

• Ashok Leyland has received a Rs 298 crore order to supply 320 fully built buses to the Tamil Nadu State Transport Corporation.

• Ola Electric Mobility – Company is renegotiating its agreements with Rosmerta Digital Services and Shimnit India, which has temporarily impacted February registrations. Despite this, sales remain strong, and the registration dip is expected to be streamlined in the coming weeks.

• NTPC plans $62bn investment to build 30GW nuclear power capacity in India - Indian government-owned power firm NTPC is looking to invest about $62bn to build 30GW of nuclear power capacity over the next two decades, three times more than expected. NTPC was initially aiming for 10GW of nuclear capacity but tripled the goal after the government this month unveiled plans to allow foreign and private investment in this sector, the sources told the news agency.

• Tata Steel Gets Neath Port Talbot Council’s Nod for New Furnace - Tata Steel said that the Neath Port Talbot Council has approved its UK unit’s plan to set up a new electric arc furnace at its steel mill. Company is committed to begin large-scale work on site this summer” and start the furnace from end-2027, Tata Steel UK CEO. Tata Steel is investing £1.25 billion in the project at its Port Talbot site and the UK govt is providing support of £500 million.

Global Market Update

• European Market - The European stocks rally took a pause on Wednesday amid mixed earnings and after President Donald Trump’s latest tariff threats stoked concern about a widening trade war. Glencore Plc slipped after profit fell, while HSBC Holdings Plc posted better-thanexpected earnings. UK and France Index declined 0.2% each while Germany Index advance 0.2%.

• Asian Market - Asian stocks pulled back after a five-day rally that pushed a regional gauge into overbought territory, as investors turned cautious amid increasing trade tensions and geopolitical uncertainty. US President Donald Trump threatened to impose 25% levy on goods ranging from autos to chips. New Zeeland Index reverses early declines to post a gain after the central bank cut rates by 50bps to 3.75% as expected. Japanese stocks fall, with the Nikkei down 0.4% and Honda and Toyota posting declines.

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