Tariff Relief Or Ceasefire? New-Age Tech Stocks See $3 Bn M-Cap Surge

In line with the BSE Sensex, 31 of the 33 new-age tech stocks ended Monday’s trading (May 12) in the green, gaining in a range of 0.67% to 10%.

As a result, the total market capitalisation of these new-age tech stocks stood at $82.18, up over $3 Bn from $79.11 Bn at the end of trading on Friday. 

The broader Indian market saw its best day in four years as India-Pakistan tensions seemingly eased up and the tariff war between US and China also cooling down. It’s not clear whether these factors lifted the new-age tech stocks cohort on Monday. 

SME board companies such as TAC Infosec, Veefin Solutions and DroneAcharya closed the day after hitting the upper circuit, while gaming major Nazara’s shares touched a two-year high of INR 1,168.90 during intraday trade. 

To note, shares of cybersecurity firm TAC Infosec gained the most on the day, ending the session up 10% at INR 1,093.70.

Ajit Mishra, senior VP of research at Religare Broking, believes the rally could be a sign of things to come in the future. “The easing of geopolitical concerns and progress on global trade talks brought significant relief to the markets, reflected in a sharp drop in the India VIX volatility index,” he told Inc42. 

Only NSE listed Macobs Technologies, parent company of men’s hygiene brand Menhood, ended the day in the red, with a 1.48% loss compared to Friday, May 9.  

Tariff Relief Or Ceasefire: What Caused The Spike?

The key trigger for the bull run today was the announcement of a ceasefire between India and Pakistan over the weekend after intense clashes along the line of control and international borders, as per Mehta Equities’ senior VP Prashanth Tapse.

Further, the de-escalation of the tariff war between the US and China is also likely to have been a factor for the gains from Monday’s trading. 

Sundar Kewat, technical and derivatives analyst, Ashika Institutional Equity, added, “The rally followed a weekend ceasefire between India and Pakistan after four days of cross-border firing. Additionally, US stocks futures saw an uptick, buoyed by significant progress in US-China trade talks over the weekend.”

In this particular case, the countries have agreed to rationalise reciprocal tariffs for imports into their territories. While the US will reduce the extra reciprocal tariffs to 30% from 145%, Chinese duties on US imports will fall to 10% from 125%. 

The new measures are effective for 90 days for the time being, but it has created a feeling that things will soon be back to normal for the global trade environment after months of uncertainty.

“Sustained foreign institutional investor (FII) inflows, along with a resurgence in retail participation fuelled by expectations of a swift improvement in business sentiment, propelled today’s upside. However, while the momentum remains strong, the market may enter a phase of consolidation in the near term as investors await concrete signs of earnings growth,” according to Vinod Nair, head of research for Geojit Investments.

Ather, Zaggle Improve Bottomline

Monday’s bull run comes amid the Q4 financial disclosures for many of the listed companies. 

Fintech SaaS company Zaggle and recently listed EV maker Ather Energy disclosed their Q4 financials on Monday.

Zaggle’s PAT surged 62% YoY to INR 31.1 Cr in Q4 while its topline jumped nearly 51% YoY to INR 412.1 Cr. The company’s shares closed today’s trading session up 8.38% from previous close at INR 366.60. 

Meanwhile, Ather Energy managed to trim its losses by 17% YoY to INR 234.4 Cr while its operating revenue surged 29% YoY to INR 676.1 Cr. The company’s shares closed up 3.29% at INR 309.55.

On the other hand, this was the first trading session for MapmyIndia and Swiggy after their respective Q4 financials announcements on Friday. 

MapmyIndia emerged as the fourth biggest gainer today, with its shares zooming 7.5% to end at INR 1,982, after the company’s net profit zoomed 28% YoY To INR 49 Cr while its operating revenue grew 34% to INR 143.6 Cr. 

Meanwhile, Swiggy shares ended the trading session up 2.33% — the gains coming despite significantly higher losses in Q4.