Indian shares rise as financials gain; US tariff threat drags auto, pharma stocks

Indian equity benchmarks advanced on Thursday, driven by gains in heavyweight financials, although a decline in Tata Motors following the announcement of U.S. tariffs on auto imports capped further gains.

The NSE Nifty 50 rose 0.45% to 23,591.95, while the BSE Sensex traded 0.41% higher at 77,606.43.

The benchmarks traded about 0.2% lower at the open, before reversing losses in a volatile session that marked the expiry of Nifty 50’s March derivatives contracts, in which investors either closed their positions or rolled them over.

Financials rose 0.7% as foreign inflows resumed over the last five sessions.

“Gradually, conviction is returning to Indian markets. Financials have led the benchmark gains due to steady earnings outlook, cheaper valuations,” said Deven Choksey, managing director at DRChoksey FinServ.

Eleven of the 13 major sectors logged gains. The more-domestically-focussed small-caps and mid-caps rose about 1.2% and 0.4%, respectively.

The auto index fell 1%. Tata Motors, which exports a significant chunk of its money-making Jaguar Land Rover cars to the U.S., shed 5.6% after President Donald Trump announced plans for 25% tariffs on auto imports, effective April 2.

Indian shares little changed as investors eye US tariff clarity

Trump is also due to implement retaliatory tariffs on April 2 but the U.S. administration has indicated that not all tariffs will be levied.

Auto ancillary companies fell, with Samvardhana Motherson losing 2.6%, Sona BLW down 6%, Bharat Forge declining 2% and Apollo Tyres losing about 1%.

These companies have significant global exposure and any change in U.S. tariffs is a risk for them, according to J.P.Morgan and CLSA.

Pharma firms declined 0.4%, also weighed down by tariff worries. The U.S. accounts for about 31% of India’s total pharmaceutical exports.

Among individual stocks, Larsen & Toubro gained about 1.7% after CLSA reiterated “outperform” and termed the engineering, procurement and construction (EPC) company its top pick among Indian large-caps, citing a positive earnings outlook.