Indian equities staged a firm recovery on Wednesday as benchmark indices snapped a five-day losing streak and investors gravitated towards metal stocks after the government imposed a safeguard duty on selected steel imports. The Sensex surged 654.73 points to 85,329.81 while the Nifty climbed 212.75 points to 26,151.60 by early afternoon.
Sensex rally driven by steel safeguard duty
The decisive trigger for the move was the Centre’s announcement of a three-year safeguard duty of up to 12 per cent on certain steel imports. The measure, aimed at protecting domestic producers and supporting local prices, prompted sharp gains in major steelmakers. JSW Steel, Tata Steel and Jindal Steel were among the top performers, with intra-day rises of up to 5 per cent.
Tata Steel traded higher at Rs 179.70, JSW Steel moved up to Rs 1,148.10 and Jindal Steel was at Rs 1,057.80. Other metal names such as Jindal Stainless and NMDC also saw positive moves, reflecting renewed investor confidence in the metals complex.
Market breadth was firmly in favour of gains, with roughly 2,455 shares advancing against 1,009 declining and 170 unchanged. The advance suggested a broad-based recovery, as buying was evident not only in heavyweight metal stocks but also across mid-cap and small-cap segments.
Additional supportive factors underpinned trading. Brent crude eased to around $61.27 a barrel, relieving some inflationary pressure and helping sentiment. The India VIX, a gauge of expected volatility, declined by over 3 per cent to 9.37, signalling lower anxiety among investors and encouraging risk-taking in equities. Traders also cited bargain hunting after recent declines in the Sensex and Nifty.
“The market has the potential for a directional move upwards but is being weighed down by sustained FII selling and the absence of fresh triggers like positive news on the US-India trade front,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd. The comment highlighted that, while domestic policy moves have re-activated buying, flows from foreign institutional investors remain an important variable.
Sectoral leadership from steel was complemented by selective strength in consumer and jewellery-related names. Titan Company rose on the session while marquee technology and financial names such as Tata Consultancy Services and Bajaj Finance saw modest pullbacks. This rotation underlines the market’s selective nature even on a rally day.
Indices tracking mid- and small-caps also participated, with the Nifty mid-cap and small-cap 100 indices gaining up to 1 per cent. The broader participation suggested that traders were looking beyond headline large caps for value opportunities ahead of the new year.
Looking ahead, market participants will be closely watching foreign fund flows, commentary from corporate earnings and any additional policy signals that could sustain momentum. For now, the combination of a protective trade measure for steel, easing commodity prices and reduced volatility has provided a platform for the recent rally.
Investors are advised to balance optimism with caution, keeping an eye on macro data and global developments that could alter risk appetite quickly.
Key Takeaways:
- Sensex gained 654.73 points while Nifty rose to 26,151.60 as metal stocks led the rebound.
- Sensex rally was driven by a three-year safeguard duty of up to 12% on select steel imports, boosting domestic producers.
- Supportive factors included easing Brent crude, lower India VIX and bargain buying across mid- and small-caps.
- Analysts noted headwinds from foreign institutional investor selling despite the positive momentum.
