MUMBAI: Indian equity markets extended their rally for the second straight session on Tuesday, buoyed by easing global trade tensions. The benchmark indices—the BSE Sensex and NSE Nifty50—jumped more than 2% each after US President Donald Trump announced tariff exemptions for smartphones and computers and signalled a potential delay in auto tariffs.
The Sensex soared 1,577.63 points (2.10%) to close at 76,734.89, while the Nifty surged 500 points (2.19%) to settle at 23,328.55. This follows a similarly strong performance on Friday, with markets remaining shut on Monday.
Sectorally, the Nifty Realty index led the gains, climbing over 4.5%, followed by Nifty Auto and Nifty Metal. Broader markets outperformed the benchmarks, with the Nifty Midcap 100 and Nifty Smallcap 100 indices rising 2.92% and 3.02%, respectively.
IndusInd Bank, Shriram Finance, L&T, Adani Enterprises and Tata Motors were the top gainers in the Nifty50 pack. ITC and HUL were the only laggards.
Vikas Gupta, CEO and Chief Investment Strategist at OmniScience Capital said that the markets are adjusting to the new reality of daily Trump Twists and Turns.
“As we had mentioned earlier, there will be continuous announcements by US, other countries, specific companies and their proactive statements and counter responses. As these appear the markets will react to them. In this scenario, frequent changes to the markets are a given. Sometimes when tariffs look like they have been temporarily removed the markets will react positively, when something unexpected happens they will react negatively,” added Gupta.
Ajit Mishra – SVP, Research, Religare Broking added that the rally was driven by optimism around the deferral of tariffs and the recent exemptions on select products, raising hopes for potential negotiations that could ease the overall impact on global trade. “On the technical front, a decisive break above 23,400 in Nifty would further reinforce the recovery trend. Adding to the bullish sentiment, the sharp 20% decline in India VIX is a positive sign. In this backdrop, we recommend maintaining a stock-specific trading approach, with an emphasis on quality stock selection and disciplined trade management,” stated Mishra.
Aditya Gaggar, Director of Progressive Shares said that the presence of positive global triggers, such as the relaxation in tariffs, allowed the Index to start the truncated week on a strong note. “However, it then oscillated within a narrow range before closing higher, ending the trade at 23,328.55 with notable gains of 500 points. If the Index continues its upward momentum, it may encounter resistance in the 23,440-23,500 range, while strong support is expected at 23,050,” stated Gaggar.