The Indian stock market rallied sharply on Friday as benchmark indices Sensex and Nifty witnessed significant gains following a 90-day pause on new tariffs announced by the United
The Indian stock market rallied sharply on Friday as benchmark indices Sensex and Nifty witnessed significant gains following a 90-day pause on new tariffs announced by the United States. The move, aimed at easing global trade tensions, brought cheer to domestic investors, even as global markets remained cautious due to the ongoing US-China trade spat.
In a surprising move, US President Donald Trump announced a temporary 90-day pause on imposing new tariffs on all countries except China. This announcement helped soothe investor concerns and triggered a strong rebound in Indian equities.
The BSE Sensex surged by 1.77% or 1,310.11 points to close at 75,157.26, while the Nifty 50 gained 1.92% or 429.4 points, ending the day at 22,828.55. This marked one of the strongest trading sessions in recent weeks, defying the negative sentiment across most global markets.
The rally wasn’t limited to frontline indices. The broader market also participated actively, with the Nifty Midcap 100 and Smallcap 100 indices both gaining 1.85% each.
Among sectoral indices, Nifty Metal led the gains with a 2.93% rise, followed by Nifty Oil & Gas, which climbed 2.2%, and Nifty IT, up by 1.75%.
Top gainers on the Nifty 50 included:
Hindalco Industries (up 6.7%)
JSW Steel (up 4.99%)
Tata Steel (up 4.95%)
Coal India (up 4.6%)
The strength in metals was primarily due to expectations that Indian exporters could benefit if global trade tensions keep China isolated.
Interestingly, while Indian markets rallied, global markets remained under pressure due to the ongoing escalation in the US-China trade war.
The Nikkei 225 fell by 2.96%, Germany’s DAX lost 1.2%, the Euro Stoxx 50 dropped 0.54%, and KOSPI in South Korea declined by 0.5%.
Traders across Asia and Europe feared that China’s retaliation to the US tariff hikes could further intensify global trade uncertainties.
According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, the rally was largely driven by relief over the US tariff decision. “Markets defied the bearish world equities sentiment to end sharply higher on the back of strong all-round buying,” he said.
However, he warned that volatility might return, especially with China retaliating by announcing 125% tariffs on US imports, effective from Saturday.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that the US bond market had a major role to play in forcing Trump’s decision. “Bond vigilantes caused a sell-off in US Treasuries, pushing the 10-year bond yield to 4.5%, which eventually led to the rollback,” he explained. The 10-year yield currently stands at 4.46%, and the US dollar index has dropped to 100.
Despite the rally, experts advise caution going forward. “There is no room for a sustained rally in the market in the present uncertain context,” said Vijayakumar. However, he pointed out that India’s macroeconomic fundamentals remain strong, and the country is one of the least affected by the global trade war.
He recommended that investors focus on fairly valued large-cap stocks and prioritize capital preservation over aggressive returns, especially in the face of possible market corrections.
Market watchers expect that global cues will continue to dominate sentiment in the coming sessions. With China’s retaliation now official, traders are bracing for more volatile sessions ahead. If the US and China fail to find common ground, the trade war could escalate, dampening the recent optimism.
In India, the next leg of the rally may depend on:
Corporate earnings from key companies.
Inflation and IIP data.
Global commodity prices.
FII/DII investment trends.
Source – Business Today
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