Ending a four-session losing streak, the Indian equity benchmarks Sensex and Nifty settled with marginal gains on Tuesday. Caution prevailed in the market ahead of the U.S. CPI report, slated for release on Wednesday, which could further impact bets on a Fed rate cut. Investors also kept a close eye on Donald Trump's action plan as his tenure as U.S. President begins next week. Although the market has priced in Trump's expected actions, the focus remains on actual implementation and its impact, says an analyst.

The 30-share Sensex closed 169.62 points, or 0.22%, higher at 76,499.63. During the session, the BSE benchmark traded in a narrow range of 76,835 to 76,336.

In a similar trend, the broader Nifty50 ended at 23,176.05, up by 90.10 points, or 0.39%. It touched an intraday high of 23,264.95 and a low of 23,134.15.

Outperforming the benchmark indices, the broader markets settled with solid gains, with the Nifty Midcap100 and Nifty Smallcap100 indices surging 2.45% and 1.98%, respectively.

“A rebound in the global market and easing domestic CPI inflation provided respite to the broader indices. This may offer some leeway for the RBI in its next policy meeting; however, rising oil prices and higher 10-year yields will be watched carefully,” says Vinod Nair, Head of Research, Geojit Financial Services.

In the BSE Sensex pack, 19 out of 30 stocks closed in the green, with Adani Ports, NTPC, Tata Steel, Zomato, and Tata Motors emerging as the top gainers. On the other hand, HCL Tech, Hindustan Unilever, Titan, TCS, UltraTech Cement, and Infosys were among the notable losers.

HCL Tech shares declined 8.6% a day after the company released its Q3 results. Sentiment was dented by the IT major’s marginal guidance upgrade, which hinted at a weaker exit rate for Q4.

On the sectoral front, barring Nifty IT and FMCG, all indices closed higher, led by banking stocks. The NIFTY PSU Bank index ended 4.20% higher, while the Bank Nifty and Nifty Private Bank indices rose up to 1.4%.

“The IT sector weighed down the markets amid concerns over weak earnings guidance for Q4. Domestic sentiment will likely focus on the ongoing earnings season and the upcoming Union Budget, which has garnered mixed views,” says Vinod Nair, Head of Research, Geojit Financial Services.

Rupak De, Senior Technical Analyst at LKP Securities, shares his technical view, stating that the Nifty remained choppy during the session, forming a bullish Harami Cross pattern on the daily chart. “A bullish Harami pattern, especially after a significant correction, often signals a potential short-term recovery. The Nifty appears positive for the short term as long as it remains above 23,135. On the upside, it could move towards 23,400, and a decisive move above this level may lead to further gains.”

On the global front, most Asian markets closed higher today, barring Japan’s Nikkei 225, as investors digested news related to U.S. tariffs. Reports suggest the Trump administration is planning a gradual, rather than sudden, tariff hike under the International Emergency Economic Powers Act.

Among Asian stocks, China's Shanghai Composite was the top performer, gaining 2.5%, followed by Hong Kong’s Hang Seng, which added 1.8%. South Korea’s KOSPI and Australia’s ASX 200 rose by up to 0.5%. Conversely, Japan’s Nikkei 225 index closed 1.8% lower as it resumed trading after a holiday break.

In overnight trade, U.S. stocks closed mixed as a rise in bond yields pushed the dollar index higher. The Dow Jones Industrial Average and the S&P 500 gained 0.86% and 0.16%, respectively, while the tech-heavy Nasdaq Composite slipped 0.38%.

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