Stocks fluctuate amid trade tensions, and Gold Prices & Silver Prices react to market trends
The global stock market is undergoing significant movements as various economic and geopolitical developments shape investor sentiment. The impact of trade tensions, central bank policies, and commodity price fluctuations is being closely monitored. With major indices experiencing volatility, attention remains on how interest rates, inflation, and global trade policies will influence future trends.
Global Market Overview
On March 4, 2025, the U.S. stock market experienced a sharp decline, with the Dow Jones Industrial Average falling by approximately 698.44 points, or 1.62%, closing at 42,492.80. The S&P 500 dropped by 88.03 points (1.50%) to 5,761.69, while the Nasdaq Composite lost 210.73 points (1.15%) to settle at 18,139.46. This decline was largely driven by investor concerns over the recent enforcement of new tariffs by the U.S. government.
Asian markets, in contrast, showed resilience. Chinese stocks in Hong Kong outperformed regional peers following the announcement of the National People’s Congress in Beijing setting an ambitious economic growth target of around 5% for 2025. Japan’s Nikkei 225 and South Korea’s KOSPI also showed positive movement as investors remained optimistic about economic recovery.
In European markets, stocks traded mixed as investors assessed the impact of inflation and economic growth projections. The FTSE 100 in the UK and DAX in Germany fluctuated due to concerns over energy prices and interest rate policies.
Impact of U.S. Tariffs on Global Markets
A key factor affecting global stock markets is the U.S. government’s imposition of new tariffs on major trading partners, including Canada, Mexico, and China. These tariffs, set at 25% on specific imports, were introduced to counter perceived economic imbalances and safeguard domestic industries. However, the measures have triggered retaliatory responses from affected nations, intensifying global trade tensions.
In response, Mexico and Canada announced reciprocal tariffs on U.S. goods, including agricultural products and industrial equipment. China, on the other hand, hinted at stricter regulatory measures on American technology firms operating in its markets.
These trade restrictions have introduced uncertainty in the global supply chain, affecting sectors such as manufacturing, automotive, and consumer goods. Market analysts predict continued volatility in equities as businesses and investors adjust to changing trade policies.
Commodity Market Movements
The commodity market has been significantly influenced by global trade developments and economic indicators. Spot silver prices rallied for the second consecutive day on March 4, trading at $31.77 per ounce, marking a 0.23% increase. The MCX May Silver contract also rose to ₹96,236, reflecting a 0.19% gain.
Gold prices, however, witnessed a minor correction due to a stronger U.S. dollar and rising Treasury yields. Spot gold prices eased by 0.3%, with investors adopting a cautious stance ahead of key central bank announcements.
In India, gold and silver prices have maintained an upward trend. Gold prices for 10 grams of 24-carat gold were recorded at ₹87,563, an increase of ₹780. Silver prices per kilogram stood at ₹101,200, marking a rise of ₹1,200.
Crude oil markets also showed movement, with Brent crude prices stabilizing near $86 per barrel amid ongoing geopolitical tensions and production cuts by OPEC+ members. The energy market continues to be a critical factor in inflation trends globally.
Indian Stock Market Performance
The Indian stock market witnessed gains on March 5, 2025, with benchmark indices trading higher. The Nifty 50 index recorded a 0.65% increase, while the BSE Sensex rose by 0.58%, reflecting positive investor sentiment.
A major driver of this rally was the information technology (IT) sector, which rebounded after a period of underperformance. The Nifty IT index surged by 2%, led by Coforge, whose shares jumped by 9.7% following a major acquisition deal with Sabre Corp. This news bolstered optimism within the IT industry, which has been facing challenges due to global economic uncertainty.
Additionally, Rail Vikas Nigam Ltd (RVNL) reported a 4% increase in its stock price after securing a ₹729 crore order from the Himachal Pradesh State Electricity Board for infrastructure development. This order is part of the government’s broader initiative to enhance power distribution networks across the country.
Welspun Specialty Solutions Limited also made headlines after it was selected as the lowest bidder for a ₹232 crore contract to supply stainless steel seamless boiler tubes to Bharat Heavy Electricals Limited (BHEL). This announcement led to a 5% surge in Welspun’s stock price, highlighting investor confidence in the company’s growing order book.
Sectoral Trends and Market Sentiment
Banking & Financial Services
The banking sector remained stable, with most major stocks trading in a narrow range. The Nifty Bank index showed moderate movement as investors assessed the impact of inflation and potential interest rate cuts. State Bank of India (SBI) and HDFC Bank saw mild gains, while ICICI Bank and Axis Bank experienced minor corrections.
Pharmaceutical & Healthcare
The pharmaceutical sector remained a mixed bag, with some stocks benefiting from positive regulatory approvals, while others faced pressure due to rising raw material costs. Sun Pharma and Dr. Reddy’s Laboratories showed slight gains, while Cipla faced minor declines.
Automobile Sector
Auto stocks saw a marginal uptick following reports that domestic vehicle sales remained strong in February. Maruti Suzuki, Tata Motors, and Mahindra & Mahindra saw moderate gains, indicating sustained demand in the sector.
Real Estate & Infrastructure
Real estate stocks performed positively, supported by increased investments and housing demand. DLF and Godrej Properties recorded gains, reflecting strong buyer sentiment in the residential segment.
Key Economic Indicators: Services PMI Declines
India’s February Services PMI (Purchasing Managers’ Index) declined to 59.0 from 61.1 in January 2025, indicating a slight slowdown in the services sector. However, the index remained well above its long-term average, signaling continued expansion.
The PMI report cited productivity gains, strong demand, and new business intakes as the primary drivers of output growth. Despite the minor decline, the services sector remains a key contributor to India’s economic performance.
Stock Market Derivatives Update: NSE Shifts Nifty Expiry to Monday
A major update in the Indian stock market was the National Stock Exchange (NSE) shifting the Nifty derivative expiry from Thursday to Monday, effective April 4. This change affects weekly, monthly, and quarterly contracts for the Nifty index and other related derivatives. The decision is expected to enhance market liquidity and improve risk management strategies for traders.
Following this announcement, BSE stock prices declined, as traders assessed the potential impact of this shift on trading patterns and derivative volumes.
Investor Outlook and Market Trends
The current stock market scenario reflects a balance between optimism and caution. Investors are closely watching global trade policies, central bank decisions on interest rates, and economic data releases to determine the next market moves.
Key factors that will shape market performance in the coming weeks include:
Inflation Data: Any changes in inflation trends could influence interest rate decisions.
Corporate Earnings: Quarterly results from key companies will provide insights into sectoral performance.
Geopolitical Developments: Ongoing trade negotiations and potential tariff escalations will impact global markets.
Given the heightened volatility, market participants are advised to adopt a diversified investment approach, focus on long-term trends, and stay updated on macroeconomic indicators to make informed decisions.
The stock market on March 5, 2025, is witnessing a mix of gains and declines across various sectors. Geopolitical tensions, trade policies, and economic indicators continue to shape market movements, with global and domestic equities reacting accordingly. Investors should remain vigilant, monitor global trends, and strategize based on evolving market conditions to navigate uncertainties effectively.
