Indian stock market wrapped up Tuesday’s trading session, March 11, on a flat note but managed to weather weak global sentiment amid rising fears of a slowdown in the U.S. economy after President Donald Trump did not rule out a recession amid the implementation of U.S. tariffs.
The market opened on a sour note, tracking weak Asian peers, but later recovered its lost ground in the following hours to end the day with mild gains.
Analysts believe that domestic equities have seen a major correction in recent months and now the fall in global markets is unlikely to weigh heavily on Indian equities, as the majority of stocks have already priced in global uncertainties and are finding support from lower levels.
Growing recession fears, however, triggered further sell-off in Indian technology stocks, as these companies derive 50-70% of their revenue from the U.S. market.
The Nifty 50 ended the session 0.17% higher at 22,499, while the Sensex closed at 74,102.56, marking a 0.02% drop from Monday’s close. The broader market indices ended mixed, with the Nifty Midcap 100 rising 0.67% to 48,762, while the Nifty Smallcap 100 tumbled 0.80% to 15,076.
Global brokerage firm Morgan Stanley expects Indian equities to rebound in 2025, recovering lost ground to other emerging markets. It said, India is likely to be a stock picker’s market from here on, in contrast to one driven by top-down or macro factors since the COVID-19 pandemic.
The brokerage said U.S. reciprocal tariffs will likely be a minor risk and added that valuations in large caps have turned attractive after the recent dip.
Earlier, Jefferies also stated that historically, India tends to outperform other emerging markets within 90-180 days following a period of underperformance.
It noted that the country’s valuation premium is now closer to average levels, well below its 2024 peak. With the dollar index down 6% from its peak, FPI flows could potentially reverse, as Jefferies’ FPI ownership tracker indicates that India’s positioning among EM funds is at a decade low.
